In his latest blogpost, Cummings cites a rubric for value creation in a business discussed by David Friedberg. “This articulation of the business value creation journey is the best I’ve ever seen,” Cummings writes. What got him so excited? It’s the six easy-to-remember points:
- Can you make a product?
- Do people want to buy your product?
- Can you make a positive gross margin selling the product?
- Can you make a return on the marketing dollars you have to spend to generate the gross profit?
- Can you scale the amount of money to grow your business such that as you grow, the return goes up, not down?
- Can you transition to being a platform (multi-product company)?