Recurring revenue vs the one-time sale

	Recurring revenue	Unit economics
Definition	Income that repeats — subscriptions, services, consumables — rather than a one-time sale. The model that offsets hardware's capital intensity.	Whether a single manufactured unit earns a profit once the cost to source, build, test, and ship it at scale is counted — the make-or-break math beneath any hardware business.

The difference

A one-time sale is judged by unit economics: does a single manufactured unit earn a profit once it is sourced, built, tested and shipped at scale. Recurring revenue is judged by customer lifetime value and churn: does the relationship earn more than the sale did. Nespresso turned a $99 machine into four figures of cumulative profit per customer through capsules; iRobot Select tried to wrap a subscription around a robot and the subscription did not hold. The difference was not the idea but the layer it was built on.

Try it on your product

Customer lifetime value calculator.

From the chapter of Tangibles that introduces these terms. Definitions are the book's glossary entries.

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