This section is about whether the business mechanics actually work.
If you lose money on each customer, growth makes the problem bigger.
Real life: A startup paying $120 to acquire a customer that only generates $70 in gross profit is not “scaling.” It is accelerating losses.
Revenue minus variable costs tells you whether each sale helps cover the business.
Real life: A product that sells for $50 with $38 of variable cost leaves only $12 to cover fixed costs, overhead, and profit.
Customer value must clearly exceed customer acquisition cost.
Real life: If you spend $300 to win a customer worth $280 gross profit, you bought growth that destroys value.