Rule of 40
A benchmark stating that growth rate + profit margin should exceed 40%.
Category
Philosophy
Term ID
rule-of-40
Related
4 Terms
Status
Defined
01 — The Deep Dive
Understanding the Mechanics
The Rule of 40 creates a balance between growth at all costs and profitability. It forces founders to verify that high growth is not masking a fundamentally broken economic model.
Ready to Build?
Whether you need a sales system fix or a custom tool, let's talk.