A Smart Bear · Jason Cohen
articleprincipleFermi ROI: Fixing the ROI rubric
20 June 2022Profit
Source excerpt
About A Smart BearTraditional rubrics fail to reveal the best answers, or how to explain those answers to others. After explaining why, the following system solves both failures.
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Apollo layer
What a founder can learn
Founder takeaway
A useful ROI rubric must do two jobs: distinguish the strongest choices and make the reasoning behind those choices easy to communicate. If it merely produces scores without clarifying trade-offs, redesign it.
Why it matters
Founders allocate scarce time and capital through imperfect decision tools. A rubric that obscures differences or rationale can create false confidence, weak prioritization, and poor alignment.
Relevant guides
Put it to work
Take one current investment decision and ask: Does our rubric clearly separate the options, and could another leader explain why the winner won? Identify and revise any criterion that fails either test.
Private notes