After the rug got pulled out from beneath them in 2008, a lot of businesses and investors realized that they were playing their own version of Hollywood economics: Pour tons of money into developing a product, then pray for a hit. If it doesn’t work out, you’re out of luck. These companies had no visibility into their finances. They had no predictability in their forecasts. They started every quarter with nothing in the bank and had to crawl all the way up to hit their number. That’s not how it works with subscription revenue. A $10 million company with 80 percent subscription revenue starts
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