Importance of Multiple Revenue Streams for a Startup

Rajat Yadav
Nov 1, 2018 · 2 min read
The picture depicts the revenue sharing among different revenue streams for the Z2P Loan Platform for October 2018.

In one of my previous posts(https://medium.com/datadriveninvestor/learning-revenue-growth-101-how-to-visualize-your-startups-growth-from-a-revenue-perspective-231709ff6fa8), I had already detailed out the approach towards creating multiple revenue streams and then subsequently growing each of them.

The time order in which our revenue streams came into existence: R2 -> R3 -> R1 -> R4 -> R5
R2 started as our first and major revenue stream. And as you can see, over the time, R1, which started as a very minor revenue stream turned out to overtake R2 and become the major revenue generator for us. We can now see even R3 & R4 coming close to R2 to transition to major revenue streams.
Also, since R2 is the oldest revenue stream, it is also the most stable and fluctuation-free stream compared to others, while R5 is the most unstable. My task at hand right now is to stabilize R5 and then grow it.
Thus, a very important task for every founder is to keep discovering new revenue streams and subsequently strengthen them.

Let me go towards the detailing of why is it important to have multiple revenue streams:

1) Freedom to take radical decisions:
Since you have multiple sources giving you revenue, you can now, without fear, do experiments and disruptions in your products knowing that even if the decision goes bust, there are other revenue streams to support the failed decision and the company won’t face an existential crisis.

2) Shock Absorber Against Potholes:
You never know when a govt. regulation is passed making some of your products/services stop or reduce margins. Or, a competitor comes in and your users start migrating to it at an alarming rate. In such cases, the other revenue streams will cover you up and reduce the impact of the jerk.

3) Faster Growth
Instead of putting all your thoughts and ideas into growing one revenue model, you can now start growing multiple revenue streams simultaneously, thus, increasing your total revenue growth exponentially.

Thus, never be content with single revenue models

Data Driven Investor

from confusion to clarity not insanity

Rajat Yadav

Written by

Founder & CEO at Z2P. Disrupting financial services in India.

Data Driven Investor

from confusion to clarity not insanity

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