Marcus hit Rule of 40. The board loved it. Six months later, competitors at Rule of 30 stole his biggest deals and sold for 3x his valuation.
Here’s what he discovered: Rule of 40 measures whether you’re financially healthy today. It doesn’t measure whether you’ll matter tomorrow.
While he was cutting costs to hit 40, competitors were investing in strategic moats that made them worth 2.3x more.
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