That doesn’t include R&D & marketing costs which make them unprofitable overall.
I guess they are betting that R&D costs are fixed(ish) or at least will grow slower than revenue. Which of course doesn’t always work, especially over the last few years where free money resulted in massive bloat.
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Because SaaS business models were built around operating at a loss in order to gain a monopoly and rent seek?
Loss?
Many (most? Except maybe asana) public SaaS companies have 20% cost of revenue AFAIK
Yes loss. 70% of the SaaS companies that IPO'd in the past five years are loosing money. The median operating margin is -21%.
Source: https://blossomstreetventures.medium.com/q1-saas-metrics-dat...
That doesn’t include R&D & marketing costs which make them unprofitable overall.
I guess they are betting that R&D costs are fixed(ish) or at least will grow slower than revenue. Which of course doesn’t always work, especially over the last few years where free money resulted in massive bloat.
And also built in a time of free Fed money laundered through VCs.