Concept · Numerical Business Rules
Rule of 40
Origin: Brad Feld (2015)
Biological Parallel
Every organism faces the same brutal trade-off: allocate energy to growth or to maintenance and storage. Young salmon devote 80% of metabolic energy to growth; mature salmon shift to 20% growth and 60% reproductive investment. The 40% threshold represents the minimum combined output—growth plus efficiency—needed to signal fitness. Below this, the organism is neither growing fast enough to compete nor efficient enough to survive lean times.