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Why Misunderstanding Startup Metrics Can Cost You Your Business

Both Sides of the Table

There has been a lot of public debate over the past several weeks about whether it’s a good thing to be “gross margin positive” or not and commentary always reminds me that some people at startups don’t quite understand financial metrics or even how to think about which ones are healthy. I’m guessing much of this was 101 to many readers.

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How to Decrease the Odds That Your Startup Fails

Both Sides of the Table

Yet I can’t help thinking there are many predictable failures that come from a lack of basic planning. It says that selling an airplane ticket for $500 and getting paid a $5 fees by the airlines (1% gross margin) is not the same thing as selling $500 of software that you built (>90% gross margin).

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