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TB

Tom Blomfield

12/16/23

@ Y Combinator

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

Video

YC

B2B Startup Metrics | Startup School

@ Y Combinator

12/16/23

Related Takeaways

AL

Aaron Levie

02/20/25

@ Y Combinator

The gross margins for AI-driven companies can significantly increase as the cost of tokens decreases, allowing for better profitability.

YC

Y Combinator Cast

05/16/25

@ Y Combinator

Full stack companies can now operate like software companies, leveraging AI to reduce the need for large operational teams and improve gross margins.

YC

Y Combinator Cast

03/01/25

@ Y Combinator

The software industry is poised to grow significantly as AI enables a shift in spending from payroll to software. This means that software will become more useful and integral to business operations.

BT

Bret Taylor

05/08/25

@ Sequoia Capital

In competitive markets, CEOs prioritize growth over cost savings, and successful AI implementations should focus on driving measurable topline outcomes.

LQ

Lin Qiao

05/19/25

@ Sequoia Capital

As companies scale their AI applications, it's crucial to find the optimal balance across quality, cost, and speed to achieve sustainable growth.

YC

Y Combinator Cast

01/25/25

@ Y Combinator

The pricing model for AI tools is shifting towards usage-based pricing, making it easier for companies to justify ROI and shorten sales cycles.

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

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

HI

Harvard Innovation Labs Cast

02/02/14

@ Harvard Innovation Labs

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

GT

Garry Tan

10/18/19

@ Garry Tan

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