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Chapter preview · Arc VI — Build moats that last

Chapter 20 — Business Model Essentials

From Transactional Sale to Recurring Value

Revenue model evolution from one-time sales to recurring services, subscription strategies for hardware companies, and creating sustainable value streams through digital service layers

Calculating unit economics — the foundation of hardware business model design

This chapter is about the underlying economic forces that drive users and buyers' behavior - as well as vendors' fortunes - in the space of tangibles: Things that think, interact, and communicate.

Production Economics, Cost accounting, and Managerial Accounting are well trodden concepts as they pertain to either physical goods or digital wares. However, successfully melding them together to crate smart business models for the sake of better value offering and extraction is a delicate balancing act.

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