Growth is useful only when the incremental transaction creates enough economic value to justify the capital and risk required to produce it.
The argument.
Revenue is an output. It is not proof that the transaction underneath it makes sense. The useful unit is contribution after the costs that actually move with the sale: product, inbound freight, channel fees, fulfillment, payment processing, returns and the acquisition expense required to create the order.
A business can therefore grow quickly while becoming economically weaker. Discounting can increase conversion while destroying contribution. Advertising can add revenue while acquiring customers above the margin available to pay for them. A retailer can add volume while demanding enough allowances and working capital to make the new business inferior to the old business.
The correct hierarchy starts with price architecture, then unit economics, channel economics, working-capital mechanics and only then marketing efficiency. Optimizing the fifth variable while the first two are wrong produces a very efficient way to lose money.
The question is not whether growth is positive. It is whether the next dollar of growth improves the trajectory of cash and contribution.
Return to the Economics Office index, or read Fourth Derivative in the Free Public Library.