TL;DR: If you lose money on each customer, growth makes the problem bigger.
This is the fastest way to separate real businesses from expensive illusions.
A startup paying $120 to acquire a customer that only generates $70 in gross profit is not “scaling.” It is accelerating losses.
Celebrating revenue growth without checking whether each incremental sale is actually good business.
If you lose money on each customer, growth makes the problem bigger.
You are here because this concept becomes more useful after Competitive Advantage and before Contribution Margin.