The four critical factors are: (a) businesses with recurring revenue bases — like a renewable subscription — are far better than ones dependent on constantly securing new customers; renewals are much easier and less expensive to secure than new sales; (b) customer retention is absolutely critical — all customers are very costly to acquire and very easy to lose in a world of almost infinite choices; (c) businesses based on
products that require constant replacement or renewal (the «razor blade» model) are much more attractive than
durable goods businesses (like selling refrigerators) where the
products have very long repurchase or replacement life cycles and where the market could even fairly quickly reach saturation points; and (d) businesses that offer
products or services that had a predictably high rate of obsolescence were much more attractive than those where the
products had long,
useful lives.