Building Recurring Revenue

reset button

It’s astounding to live in an age where a business model built on $1 per year per subscriber could net a $19 billion price tag. That’s what WhatsApp won in the acquisition lottery when Facebook acquired them last year.

$1 per year to use a service? When you have over 450 million users, it adds up. It’s simple, focused and without the vestiges of old business mindsets.

The story is telling and inspiring. We live in the subscription economy. And it makes sense where tools and technology obsolesce at a rapid rate.

Heck, even Apple and Amazon have morphed their models into a recurring revenue model on a few fronts in addition to their standard product sales model.

It’s hard to run a business where you buy a service or product one time. Every month you have to hit the reset button. You have fixed overhead costs and you have to cover your nut. It’s stressful to run this kind of business. Last month might have been good, but there is no rest. There is just the new goal.

My guess is that you can reduce and remove that stress if you thought differently. If you thought strategically and were unhindered by old mindsets, you could build a recurring revenue model.

This may require an approach of productizing a service or set of offerings that are too custom.

It may mean letting go of certain work to focus on building a stable of repeatable and loyal customers.

The gift of recurring revenue is that there is no reset button every month. Where there are fixed costs, you can match with fixed subscriptions and drive a more automated business model.

It is achievable. It starts with a willingness to take a look at the stress and craziness of your business and consider a way many an entrepreneur have taken to run a more efficient business.

It typically takes outside eyes to cut through the bias of tradition. We can always talk to build and implement such a strategy. Greener pastures do exist indeed.

Published by Don Dalrymple

I partner with founders and entrepreneurs in startup businesses. I write and consult on strategy, systems, team building and growing revenue.

Thank you! Your subscription has been confirmed. You'll hear from us soon.
Bi-weekly Newsletter: