The Importance of Gross Margins

Stanford Department of Management Science and Engineering lecturer Ravi Belani illustrates the crucial importance of “gross margins” using a simple analogy about selling cookies on the Stanford campus. He explains how a single ratio — a gross margin of 75% — is a mathematical yet almost magical key to building a business that can grow at a 3x clip per year, and turn a $1 million valuation into a $1 billion valuation in a decade.

[pradhumnkanase]

I think you are getting it wrong for the 50% margin:

I spend 50c and get 1 dollar back yes my gross margin is 50c but now I have 1 dollar in total with which I can make 2 cookies and then 4 then 8. So the multiplicative factor works on 50%margin as well.
If 50% is at zero growth then by that logic all the companies who have gross margin less than 50 are doomed which is definitely not the case.

[SAMIR-consulting]

I did not learn it like that
Simple and easy, thank you