http://www.softwarevoices.com/ Perspectives from commercial developers of consumer software en Serendipity 1.0 - http://www.s9y.org/ Mon, 28 Nov 2005 05:30:17 GMT http://www.softwarevoices.com/templates/default/img/s9y_banner_small.png http://www.softwarevoices.com/ 100 21 http://www.softwarevoices.com/archives/15-Recurring-revenue-explained-as-a-physics-problem-why-management-expectations-are-often-wrong.html Business of Software http://www.softwarevoices.com/archives/15-Recurring-revenue-explained-as-a-physics-problem-why-management-expectations-are-often-wrong.html#comments http://www.softwarevoices.com/wfwcomment.php?cid=15 0 http://www.softwarevoices.com/rss.php?version=2.0&type=comments&cid=15 nospam@example.com (Craig Ogg) You have just launched an Internet service that has a subscription model. Early growth appears to be really strong and you can't help doing the back of the envelope calculation: if acquistion continues at this rate 1 million customers is just around the corner!<br /> <br /> Unless you have been around the recurring revenue block before (or even if you have) your estimate is almost always just a linear extrapolation of your net monthly acquisition.<br /> <br /> <img width='332' height='272' border='0' hspace='5' src='http://www.softwarevoices.com/uploads/customer-growth.jpg' alt='Management often assumes growth will continue linearly, when it fact it levels off as churn grows.' /><br /> <br /> This is almost certainly wrong. (Explanation after the jump)<br /> <br /> <br /><a href="http://www.softwarevoices.com/archives/15-Recurring-revenue-explained-as-a-physics-problem-why-management-expectations-are-often-wrong.html#extended">Continue reading "Recurring revenue explained as a physics problem -- why management expectations are often wrong"</a> Sun, 27 Nov 2005 23:30:00 -0600 http://www.softwarevoices.com/archives/15-guid.html business recurring revenue