We're growing, but margins are shrinking

By
Mukund Kabra

"We're growing, but margins are shrinking" is usually a symptom, not the root cause. Define one source of truth, standardize definitions, and instrument the funnel so decisions are driven by comparable numbers.

Category:
Measurement
Reading time:
2
min read
Published on:
January 24, 2026

We're growing, but margins are shrinking

Problem

We're growing, but margins are shrinking is rarely the real problem. The real problem is what it does to decisions. You lose the ability to make confident tradeoffs. You end up optimizing what is measurable, not what is meaningful, which quietly pushes spend and effort into the wrong places. As the business scales, the gaps compound: new events get added ad hoc, dashboards diverge, and accountability disappears because no one trusts the source. The cost is not just reporting confusion. It is slow decisions, misaligned priorities, and growth bets that are impossible to prove or kill. The longer it stays unresolved, the more expensive it becomes to unwind.

Insight

Shrinking margins during growth aren't a pricing problem, they're a systems problem. Most teams scale what worked early without realizing those same systems now leak value. Marketing doubles spend before fixing attribution. Product adds features before tightening retention loops. Operations grow in size instead of efficiency. The hidden truth is that scale amplifies inefficiency. Every weak process, unclear metric, or unaligned team quietly taxes your margin as you grow. Companies that maintain healthy margins don't just sell more, they get smarter per sale. They treat growth as a multiplier of precision, not of effort.

How Velocity Approaches It

We help teams find where profit is leaking and build systems that scale efficiently. Velocity starts by mapping your growth engine across acquisition, activation, and retention to uncover where cost grows faster than value. We re-align data, product, and marketing around sustainable unit economics, fixing inefficiencies before scaling spend. Then we design repeatable systems that turn growth into leverage, not overhead. The goal isn't just to grow, it's to grow clean. If you're done chasing top-line wins that don't translate to profit, we'll help you rebuild growth that pays off.

Tags:  
LTV Optimization; Retention Growth; Upsell Systems; Monetization Strategy; Customer Segmentation; Value Ladder

Ready to scale profitably?

Let's discuss how to unlock sustainable growth without sacrificing unit economics.