Sustainable Business vs Ponzi Scheme

In the modern lexicon of leadership, few words carry more weight than “growth.” We celebrate it, chase it, and build our strategies around it. A rising user base, expanding market share, skyrocketing top-line revenue—these are the metrics we proudly showcase to boards and investors. But in our fervent pursuit of this seductive mirage, we have committed a critical error: we have conflated growth with profitability. They are not the same. In fact, they are often in direct opposition.

Numbers Do Lie, Especially When ‘Carefully’ Selected

I have watched too many promising ventures, and even established corporations, fall into this trap. The leadership team presents dazzling charts showing a steep, upward-curving line. The room energizes. What they fail to highlight is the second, steeper line spiraling downward: the cost of acquiring that growth. They are burning jet fuel to power a scooter, celebrating speed while ignoring the rapidly emptying tank.

Vanity Metrics are Seductive

This is the tyranny of the “top line.” It is a vanity metric that tells you nothing about the health of your enterprise. True, sustainable value is created in the bottom line—the revenue that remains after all costs are accounted for. A company that grows by subsidizing its product, engaging in predatory pricing, or spending two dollars on sales and marketing for every one dollar it earns is not building a business. It is financing a habit. It is a Ponzi scheme of its own making, reliant on the next round of investor capital to sustain an fundamentally unviable model.

Remember “All that Glitters is not Gold.”

The consequences of this confusion are catastrophic. It creates a culture that rewards profligacy over prudence, and acquisition over retention. Teams are incentivized to chase any and all customers, regardless of their lifetime value. The product roadmap becomes bloated with features designed to attract headlines rather than serve a core, profitable need. This is how you build a hollow company—a magnificent castle built on sand, vulnerable to the first tide of economic reality or tightened capital markets.

So, how do we reorient?

The shift is both philosophical and practical. Leaders must stop being evangelists of growth and become architects of durable business models.

First, recalibrate your key metrics. Obsess over Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio, not just raw sign-ups. Measure net revenue retention—are your existing customers spending more over time? These are the numbers that reveal a business’s true momentum.

Second, find your “narrow and deep” advantage. The most resilient businesses are not always the ones with the most customers, but the ones who serve their core customers most profitably. It is far better to have a smaller, fiercely loyal base that fuels your margins than a massive, fickle audience that bleeds you dry.

Growth is the engine, but profitability is the fuel. You cannot have one for long without the other. It is time we stop applauding the rocket ship that is headed for a crash, and start celebrating the steady, well-provisioned vessel charting a course for undiscovered value.

About Author

Fay Niewiadomski

I awaken leaders to purposefully discern the best way forward, with such clarity, that they find within themselves the courage, wisdom, and compassion to do what they never dared to do before.

I’ve been privileged to work closely with C-level officers, presidents, ministers, global chairpersons, diplomats, board members, senior business and political leaders, and their teams to successfully navigate complex, high-stakes situations and make sound business and personal decisions resulting in profound and lasting change.

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