Mark Twain once said, “There are lies, damned lies, and statistics.” There was a recent instagram post from a company called Arbonne. Arbonne is a network marketing/MLM company that sells cosmetics and vitamins. The company was touting the fact that their growth rate was higher than Google and Amazon. While the statistic is technically true, it’s also incredibly misleading.
How can they claim to have a growth rate larger than those incredibly successful companies? It is simple. When a $20 million company grows to $30 million it has a 50% growth rate. For a billion dollar company to match that rate, they need to grow $500 million. By the same token if you invest a dollar and get a 1000% return, you have $10. A fantastic growth rate but hardly one that makes you wealthy.
When a company touts their growth rate, it’s a good bet you should look at their other numbers to get the whole picture.
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