If your gross margins stink today, you might actually be okay as long as you can chart the path to having healthy gross margins over time, which obviously Paid can help you with 😉
Throw back to this gem from Pat Grady earlier this year: A lot of the companies that are ripping right now have negative gross margins. That's okay. If you have negative gross margins because you're chronically underpricing your product, that’s not good. But you have negative gross margins because you are sub scale and you can see a path toward getting to 60-80% gross margins over time, that's okay. People are getting a little more reasonable on data privacy. Instead of needing local instances in every European country, for example, you can have a single instance that spans European country. For enterprise customers, instead of needing dedicated instances per customer because they're worried about their data leaking into somebody else's results, people are now accepting multi-tenancy. There are lots of different things allowing capacity utilization to go up and COGS per unit to go down. So, if your gross margins stink today, you might actually be okay as long as you can chart the path to having healthy gross margins over time, which obviously Paid can help you with 😉 Full episode on Youtube or wherever you get your podcasts. Search 'Agent Talk #7: Pat Grady (Sequoia) - What actually works in AI startups'
