Excited to announce the launch of Standard Metrics’ latest Private Market Report. We dive into one major question: how do private companies fare under the Rule of 40? @bfeld popularized the rule in 2015. @BatteryVentures built a framework on top of it in 2019. @BessemerVP argued for an adjustment to it, prioritizing growth over margin in 2024. All of these prior analyses, however, were built on public data or small private portfolios. This is the largest private-market test of this framework we've seen to-date. We cover: - Why 89% of private companies that clear R40 do it through growth alone (vs. balanced performance) - How AI companies distribute across four different zones of growth and profitability, and why Zone 3 (high growth, low margins) is the zone to watch - The interesting cohort dynamics and surprising results around churn and stickiness amongst companies in various other zones of growth and profitability The depth of analysis in this report is something we've been building toward since we started @metrics_co. @kochiko2001 is a large part of why we've been able to get there today. Huge shoutout to Ani and team for their work on this. Ani and I chat through the history of the rule in the video below, and full report is linked here. Give it a read and let me know what you think. standardmetrics.io/reports-and-wh…
