Up to this point in the series, we’ve focused on opportunity:
Why most stocks should fail
How to spot real misunderstanding
What actually changes expectations
But opportunity without durability is just timing.
This is where most investors get hurt.
They find something misunderstood.
They spot a catalyst.
They buy the stock.
And then… the business doesn’t hold up.
The Question That Actually Matters
Before I care about:
Growth
Valuation
Price action
I want to answer one thing clearly:
If this company executes reasonably well, does it still win?
That’s a business model question — not a narrative one.
What “Durable” Actually Means
Durability is not:
Brand awareness
A cool product
A good quarter
Durability means the business gets harder to displace over time, not easier.
If success attracts competitors faster than it strengthens the moat, it’s not durable.
Three Traits of Business Models That Last
1. Embedded Workflows
The strongest businesses aren’t just used — they’re relied on.
They sit inside:
Daily operations
Revenue generation
Mission-critical processes
If removing the product causes disruption, retraining, or lost revenue, switching becomes painful.
Pain is pricing power’s quiet cousin.
2. Switching Costs (Real Ones)
Switching costs aren’t contracts.
They’re friction.
Things like:
Data migration
Process rewiring
Retraining teams
Risk of downtime
If customers can leave but don’t want to deal with the hassle, the business has leverage.
If customers can leave with one click, margins will always be fragile.
3. Budget Ownership
This one is underrated.
Durable businesses are paid from:
Operating budgets
Core expense lines
“Must-have” categories
Fragile businesses live in:
Innovation budgets
Discretionary spend
“Nice-to-have” line items
When budgets tighten, you learn very quickly who owns real demand.
Business Models That Don’t Last (Even If Growth Looks Great)
Some models look incredible early and then quietly decay.
Common red flags:
Growth driven primarily by promotions
Customer churn masked by acquisition spend
Unit economics that never quite scale
Heavy reliance on external funding
If growth requires constant force, it isn’t durable.
It’s rented.
The Litmus Test I Use
Here’s a simple test:
Does the business get stronger as it gets bigger — or just more visible?
Scale should:
Improve margins
Deepen customer lock-in
Increase strategic relevance
If scale mostly increases competition and cost, the model is fragile.
Why This Comes Before Metrics
This matters because:
You can’t spreadsheet your way into durability
Margins improve because the model is strong
Cash flow follows structure
If the model is weak, no metric fixes it.
This is the filter before revenue quality, margins, or valuation ever matter.
Everything above explains what durable models look like.
What follows is how I pressure-test them in practice.
How I Stress-Test a Business Model
I ask questions like:
What breaks first in a downturn?
Who gets paid last?
Where does pricing power actually come from?
What does success attract — customers or competitors?
If the answers get uncomfortable quickly, I slow down.
The Mistake to Avoid
Don’t confuse:
Early traction with durability
Adoption with dependence
Growth with strength
Markets do this constantly.
Your job is not to join them.
Looking Ahead
Once a business model passes this filter, only then does it make sense to ask:
Is the growth actually worth paying for?
That’s next.
— Connor
Alpha Before It Prints
Next in the series:
Revenue Growth That Matters (And Fake Growth)
© 2025 Alpha Before It Prints
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