To clarify: My point is about the marginal cost of providing a customer with service. It's not useful to talk about a certain amount of recurring revenue if you have terrible margins. I could start a business that gives you two dollars for every dollar you pay me and reach $5,000 in monthly revenue in no time at all!
Exactly. You could also make $1M tomorrow by selling gas for $1 a gallon. You'd have more customers than you'd know what to do with. But you'd lose $2M in the process. Many entrepreneurs confuse revenue with income. Positive revenue does not mean positive income. There was a good article on this regarding Ecomom's demise as a company because, in their case, getting more revenue meant necessarily incurring more losses. They didn't realize it until it was too late. They were better off not selling anything at all rather than selling something that increased their losses. In many ways, it wasn't a business. It was basically a charity where they subsidized the cost of a product for their customers without any upside for them.
