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7 Ways to Make Money from Make Startups Institute
5. Lend/Rent/Lease
What Is a Lend/Rent/Lease Model?
A Lend/Rent/Lease model generates revenue by providing customers with temporary access to an asset—whether physical (e.g., cars, equipment, real estate) or digital (e.g., software, content licensing). Unlike an asset sale, ownership remains with the provider, allowing the same asset to generate revenue multiple times.
Examples of Lend/Rent/Lease Models:
- Equipment Rentals: Temporary access to machinery, tools, or specialized equipment. (Examples: United Rentals, Home Depot Tool Rental, Caterpillar.)
- Automotive & Mobility: Short- or long-term vehicle use without ownership. (Examples: Hertz, Zipcar, Tesla Leasing.)
- Real Estate & Housing: Short-term stays, long-term leases, or commercial office space. (Examples: Airbnb, WeWork, commercial property leasing.)
- Clothing & Fashion Rentals: Access to high-end apparel for special occasions. (Examples: Rent the Runway, Nuuly.)
- Software & Digital Access: Licensing software or media for a fixed period. (Examples: Microsoft 365 Enterprise Licensing, Bloomberg Terminal, Shutterstock Image Licensing.)
Differences Between Lending, Renting, and Leasing
| Model | Duration | Ownership | Common Industries | |
|---|---|---|---|---|
| Lending | Short-term | Retained by lender | Libraries, tool-sharing platforms | |
| Renting | Flexible (hourly, daily, weekly) | Retained by provider | Cars, equipment, vacation homes | |
| Leasing | Long-term | Retained by provider (option to buy in some cases) | Vehicles, office space, enterprise software |
How Is Lend/Rent/Lease Different from Licensing?
While both Lend/Rent/Lease and Licensing involve granting access to an asset without transferring ownership, they serve different business models:
| Model | What’s Being Provided? | How Revenue Is Generated? | Example |
|---|---|---|---|
| Lend/Rent/Lease | Temporary physical or digital access to an asset | Customers pay per use, per rental period, or via leasing contracts | Hertz rents out cars for short-term use; WeWork leases office space |
| Licensing | Usage rights to intellectual property (IP) like brands, software, or patents | Businesses pay a licensing fee or royalties based on use | Dolby licenses its audio technology to TV manufacturers; Shutterstock licenses stock photos |
Optimizing Pricing & Utilization in a Lend/Rent/Lease Model
Success in this model depends on maximizing utilization, minimizing downtime, and balancing pricing with demand.
Key Strategies to Increase Profitability:
- Dynamic Pricing: Adjust pricing based on demand, seasonality, or availability (e.g., Airbnb charges higher rates during peak travel seasons).
- Membership & Loyalty Perks: Encourage repeat usage through discounted rates for frequent renters (e.g., Zipcar’s membership pricing).
- Upsells & Add-ons: Increase per-rental revenue with optional extras (e.g., Hertz sells insurance, GPS rentals, and fuel prepayment options).
- Automated Booking & Fleet Management: Use technology to reduce downtime and optimize availability (e.g., Tesla’s digital leasing process).
Being Creative to Maximize CLV in Lend/Rent/Lease Models
Because revenue depends on repeat usage and asset efficiency, businesses must encourage retention, increase transaction frequency, and reduce churn.
Strategies to Increase CLV:
-
Subscription-Based Rentals – Combining rentals with subscription perks increases customer stickiness.
- Example: WeWork offers a hybrid model where members pay a subscription for flexible workspace access.
-
Rewarding Repeat Renters – Offering discounts or VIP status for frequent users builds loyalty.
- Example: Turo offers incentives for renters who book multiple cars annually.
-
Offering Lease-to-Own Options – Giving customers the option to buy after a rental period increases lifetime value.
- Example: Toyota allows customers to lease a car, then purchase it at the end of the lease.
Final Takeaway
The Lend/Rent/Lease model is ideal for high-value, high-utilization assets where customers prefer temporary access over ownership. Businesses must focus on pricing strategy, utilization, and long-term retention to maximize revenue and CLV.
The Lend/Rent/Lease model generates revenue by granting temporary access to an asset in exchange for payment. Instead of selling outright, businesses retain ownership and earn revenue from multiple customers over time.
By the end of this section, you’ll understand:
- The key differences between lending, renting, and leasing.
- When this model makes sense for a business.
- How to optimize pricing, utilization, and profitability.
| Category | 7 Ways to Make Money |
|---|---|
| Curriculum | all |
| Created | 2025-03-13 19:56:48 |
| Last Updated | 2025-03-13 19:56:48 |
| Published: | Make Startups Institute |
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