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Rule of 40 check

Is your growth + profit balance healthy (for SaaS)?

#Growth#Finance & Accounting#SaaS & Software#Scaling

How it works

  1. Score = yearly growth % + profit margin %.
  2. 40 or more is considered healthy for software companies.
  3. Early startups can be far off — it matters most once you're scaling.
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Your result

Yearly growth

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Profit margin

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Rule of 40 score

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Learn the idea behind it

Unit economics (LTV vs CAC)

Do you earn more from a customer over their lifetime than it costs to get them?

Blitzscaling

Growing extremely fast — choosing speed over efficiency — to win a big, winner-takes-most market.

References

  1. [1]
    Blitzscaling — Reid Hoffman & Chris Yeh (2018)
    Official page Get the book
  2. [2]
    Lean Analytics — Alistair Croll & Benjamin Yoskovitz (2013)
    Official page Get the book

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