There are three main business models in tech:
Transactional: This is a standard retail or marketplace business model. Your startup takes a certain percentage cut on a transaction. This is what drives revenues in Amazon and Uber.
Subscriptions: This is when a startup provides certain functionalities for a recurrent fee. This business model provides alignment between the customer and the startup. The customers will keep paying the startup as long as they need the service.
Freemium is a subcategory of the subscriptions business model. The idea is to provide limited functionalities for free and start charging at a certain trigger point once a user is invested enough with the product or requires more sophisticated functionalities. This is Dropbox and Evernote business model. This business model is more risky than a subscriptions based one and should be avoided if possible.
Advertisement: This is when a service is provided for free for consumers and is paid off by advertisers. Startups should avoid it at all costs. This model requires a wide adoption of a service that startups do not have initially and cannot afford to wait for it.
Honorably mentions:
One time fee: This is a relic from the past when companies used to charge license fees for on-premise or desktop based software. Companies are either migrating to a subscription based one, like Microsoft with Office or Adobe with Photoshop or they are seeing their market share getting significantly reduced.
Consultancy: This is when a company charges fees to deploy or customize a service. It could provide lucrative revenues if the service that the startup provides is in high demand. The main drawback is the inability to provide a service at scale due to a lack of product.