© Bowtie and Revenue Architecture - credit Winning by Design
In Season 4, Episode 10 of Force and Friction Podcast, I sit down with Nick Buxton, a certified Revenue Architect and SaaS leader, to explore the first, and most foundational—layer of Revenue Architecture: the Revenue Model.
Nick shares why the revenue model isn’t just a finance exercise, but the starting line for scalable, predictable go-to-market execution. If your pricing, payment logic, and monetization mechanics are off, no amount of GTM or RevOps will fix it.
Whether you’re bootstrapped, VC-backed, or PE-owned, this episode shows you how to rethink how you charge, how you get paid, and how that structure sets the tempo for your entire business model.
Nick Buxton
Over the past decade, Nick has helped raise over £29M in investment, scale sales teams globally, and deliver exponential growth — including:
- 4x’ing ARR and Pipeline
- 5x’ing Average Contract Value
Watch the Episode:
What is the Revenue Model?
Think of the Revenue Model as the financial engine beneath your GTM motion. It’s not just about what you charge—it’s about how your business turns value into income, and how that cash flow shapes your ability to scale.
If the Data Model tells you what’s happening in your pipeline, the Revenue Model tells you whether your business will survive the journey.
It’s built on three foundational components:
1. Revenue Type
At the top level, your revenue model defines whether you generate income through:
- One-time transactions
- Recurring subscriptions
- Usage-based billing
- Service layers
- Or a blended model
“Your revenue type shapes your company’s DNA. Transactional revenue gives you short bursts. Recurring revenue builds compounding scale.”
Choosing the wrong type, or failing to evolve it as you scale, can stall growth, distort CAC, and misalign your teams.
2. Monetization Logic
This defines how and when you recognize revenue relative to:
- When the customer pays
- When value is delivered
- When onboarding completes
- Or when usage happens
“You’re not making money when someone pays. You’re making money when the product delivers its promised value.”
Monetization logic drives everything from customer success pressure to churn risk to cash runway. It also shapes financial visibility and investor confidence.
3. CAC Payback & LTV Dynamics
Finally, your revenue model must align with your unit economics:
- How long it takes to recover Customer Acquisition Cost (CAC)
- How long a customer stays (LTV)
- And how these numbers shift over time
“A great GTM engine can’t fix a broken payback model. If you recover CAC in 18 months and churn in 12, you’ve got a business model issue—not a sales problem.”
Early-stage companies should optimize for quick CAC payback. As you scale, LTV expansion becomes the lever for compounding returns.
The Real Job of the Revenue Model
Your Revenue Model doesn’t just tell you how much you’ll earn. It defines:
- What kind of GTM motions you can afford
- How quickly you can scale
- How much cash you’ll burn to get there
- And what financial story you’re telling your board or investors
It is the ground floor of your GTM system. If this is shaky, your entire growth strategy will feel unstable—no matter how good your CRM or campaign strategy is.
Because here’s the truth:
Revenue doesn’t start with a sale. It starts with a model that matches your customer, your value, and your economics.
And the architecture begins here.
Here are the core areas we discuss in today's episode:
The Revenue Model: Your Entrance to the Corner
Nick uses a motorsport analogy to explain why the revenue model is the critical first decision when architecting growth:
“If you get the entrance to a corner wrong, nothing else matters.”
He explains that rushing into GTM tactics without first understanding how revenue will be structured and realized is a common, and costly mistake. Founders who jump to sales motions without addressing how they get paid risk building fragility into the system from day one.
Why the Model Must Match the Motion
One of Nick’s core points is that misalignment between your revenue model and your GTM motion creates drag. For example, using an enterprise sales team for a low-price product breaks margins. Likewise, trying to scale PLG with an onboarding-heavy platform delays revenue and spikes CAC.
“Your motion has to reflect the nature of your product. If you mismatch, you’re playing uphill.”
He encourages leaders to match how they deliver value with how they capture value, ensuring that the motion supports the model.
The Danger of Skipping the Revenue Model
Nick reflects on why early-stage companies often skip this step, and how that undermines scale later:
“Model One is our equivalent of getting the entrance to the corner right. If we don’t get this bit right, it doesn’t matter what else we do in terms of GTM motions, mathematical models…”
He highlights that getting this wrong doesn’t just affect revenue, it cascades into team design, cost structure, and even how you fundraise.
Revenue Model Questions That Matter
Rather than rushing to pricing or packaging, Nick challenges companies to ask:
“What is the frequency with which we expect people to buy from us? What’s the average order value going to be? How will we charge?”
These are the structural questions that determine CAC payback, LTV, churn pressure, and your margin profile. Without these nailed down, any growth plan is built on guesswork.
Final Thoughts
Nick Buxton reminds us that your revenue model is not an afterthought—it’s the starting point of scale. Whether you’re building for product-led growth, sales-led enterprise deals, or anything in between, how you charge and when you realize revenue will dictate everything from motion to margin.
Skip this step, and your GTM will always feel misaligned. Nail it, and every other part of the architecture has a solid foundation.
The Revenue Architecture Series
Watch more episodes from the Revenue Architecture Series - get started with the founder of Winning By Design Jacco van der Kooij's interview - watch that here:
The Revenue Architecture Textbook
Order you text workbook on Revenue Architecture - more than a 'read' this is a comprehensive workbook to ensure you up skill your knowledge.
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Your Host:
A little about Mike who hosts the show. Please connect with me on LinkedIn I'd love to have you as part of our professional network.
Mike Midgley runs a portfolio career, a dynamic digital entrepreneur, NXD, strategist, public speaker, Winning by Design certified Revenue Architect and Host at The Force & Friction Podcast.
Mike has achieved successful six and seven-figure exits over a 30+ year career, raised in excess of £1.6m [$2.5m] in Venture Capital and franchised his businesses 68 times.
