Metadata
- Author: CJ Gustafson from Mostly Metrics
- Full Title:: Can BAD Gross Margins Ever Be a GOOD Sign?
- Category:: 🗞️Articles
- Read date:: 2025-11-22
Highlights
“The best AI companies right now have lower gross margins to start. And I actually think it’s an orange flag if your gross margins are 85%, 90%, sky-high.” Sarah Wang Wait, what? “What that tells me is there’s probably not much AI usage in your product. Or it’s a very light AI overlay that barely gets used.” Sarah Wang, General Partner at a16z (View Highlight)
She explained that when an AI deal goes to investment committee, partners are skeptical AF if the company’s gross margins look like Asana or Adobe. (View Highlight)