As companies mature, they should aim for a gross margin of at least 80%, with R&D expenses dropping significantly as they scale.

Your gross margins may not be great today, but you should have a clear path to achieving healthy gross margins over time as costs decrease and you capture more value.

Software businesses should target high margins, ideally around 80% to 90%, to ensure sustainability and profitability.

Operationally intensive businesses often have much lower gross margins than expected, making it essential to focus on improving these margins to ensure profitability.

Gross margin, which is revenue minus the cost of goods sold, is increasingly important for software companies, especially those using AI technologies.

Know your financial metrics, including net and gross revenue, to understand your gross margin and overall profitability.

Starbucks had an 80% gross margin due to our ability to source and roast coffee effectively.

We had a beautiful growth graph, but we realized we were running a business with only a 5% margin, which isn't sustainable for a software company.

Pricing below cost can be a risky strategy for gaining market share, often leading to unsustainable business practices. You might want to price a little lower now because your margins are going to improve with time, but it's a risky maneuver, and I advise startups to maintain an 80 to 90% gross margin.