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Author: Admin | 2025-04-27
Had limited insight into future income. They could only assume customers with earlier versions of the software would buy newer versions. Nothing was pressing them to pay Adobe more money. Now, in return for customers paying on a monthly basis, Adobe gives them newer versions of software at no additional cost. Non-recurring doesn’t mean zero predictabilityYou can always predict future revenue by reviewing past metrics. There are many factors that will affect the accuracy of your predictions, but one of the strongest factors is originality. The more original your product is, the more likely previous customers will continue buying from you and new customers will show up.Take Airbnb for instance. It created a strong community and platform that can’t be found anywhere else online. Because of this, Airbnb can make assumptions more confidently than, say, a ticket provider that competes with other ticket providers on price and availability. In the end, a ticket is just a ticket. An Airbnb is not just a hotel.The benefits of each revenue typeRob Go, the cofounder of Nextview Ventures, argues a case for non recurring revenue businesses that have large but infrequent transactions. He also mentions the benefits of each revenue type, some of which are mentioned below.Recurring revenuePredictability. People paying you now are likely to keep paying you in the future.More multiples. There are more stable metrics which makes it easier to calculate the value of the business in multiple ways.Higher lifetime value. Because you’re providing value over time, the customer will do the same for you.Non recurring revenueFaster growth. Since you’re charging a one time fee, you can charge more, which gives you more immediate money to invest in growth.Big margins. “Some companies might kill to half the dollars of contribution margin over 12 months that a non recurring business gets on
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