Oftentimes, companies think that growth is sacrificial—you have to endure long periods of low profit to generate growth. That is not true. The order is not growth followed by profit; it’s high returns followed by growth. In fact, companies that begin with returns on capital higher than the cost of capital go on to grow at double the rate of those that don’t start out that way. The big idea is that the best way to grow is to have a business that generates great returns, then scale it.
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