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

Our gross margin needs to be above 60%, ideally above 70%.

In the early stages, most companies focus on R&D, leading to zero revenue and high expenses, which is typical for startups.

For early-stage B2B SaaS companies, aiming for a net dollar retention of 125% to 150% is ideal, while mature companies should target around 110% to 120%.

Companies often mistakenly prioritize operating margins too early, when the focus should be on achieving scale first, as margins become relevant only after reaching that scale.

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.

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.

Be aware of your company's growth rate and how much you're spending versus your revenue.

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