Am I the only one that is rubbed the wrong way by this "recurring revenue" phrase? It seems like a fancy way saying, "I wish I was rich." Why not just say that?
The difference is that if you sold your company for $x million you can just put your money in a lowish risk investment and do literally whatever you want for the rest of your life with very little stress provided you don't go crazy with the yachts and strippers.
If you have recurring revenue of $x thousand per month from a product or service where revenue doesn't scale with hours worked you still have stress because if your customers leave (for example a competitor launches something better or cheaper) your revenue drops. So you still must spend at least some of your time working on that.
That's not the same though. If I'm rich now I have 1M disposable income. If I have recurring revenue, I may not have any disposable income at all, but I don't necessarily have to worry about doing paid work to pay all the bills for the next X months and can concentrate on something else / with longterm gain expectations.
They are convertible and therefore more or less equivalent. You can turn your $1 million into a long-term recurring payment by putting it in an interest-bearing account, and you can turn your recurring revenue into $1 million by taking out a loan.
I wouldn't say equivalent. It's easily convertible one way, but not the other. If you have 1M you don't have to spend it in one go and can provide yourself stable life for a long time. But nobody will give you 1M loan for unspecified purpose given you don't actually have any money left after living expenses to pay it back. If you have a company, business plan, etc. yes, you can get funding/loan. But then you get it for a specific reason, not to play around with ideas of games you may or may not feel like ever finishing.
Is that the case when you have guaranteed recurring revenue for a long time? The only reason they care about having money left for living expenses is that they're afraid you'll die or declare bankruptcy. For example, it's fairly easy to exchange an annuity for a lump sum. But then the question is, what is "recurring revenue"? If it's not guaranteed then it won't work.
Is this people applying to their personal lives? Some sort of side-project that generates "recurring revenue" so they can stop working? I can see how that would be annoying if it's indeed a trend.
On the other hand, our business is based on a quarterly subscription model so recurring revenue is a very important metric.
No, those are two different things. And being the "author" of that recurring revenue I believe feels much better than e.g. just having a rich grandfather (but the later case is still better than nothing, probably ;) )
