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Growth at all costs is no longer enough. The Rule of 40 asks whether a SaaS company can balance growth with profitability. Revenue or ARR Growth Rate + Profit Margin ≥ 40% Examples: 📈 50% growth + −10% margin = 40% ⚖️ 25% growth + 15% margin = 40% 💰 10% growth + 30% margin = 40% A fast-growing company may operate at a loss, while ...
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