Run the Numbers

Gross margins, GPUs, and the future of finance — this one’s for the metrics nerds. CJ sits down with Sarah Wang, General Partner at Andreessen Horowitz, to talk about what happens when the traditional SaaS playbook collides with AI. Sarah shares how legacy benchmarks like payback period and burn multiple start to break down in a world where compute, not headcount, drives costs. She explains why sky-high gross margins can actually be an orange flag, how finance leaders can think about resource allocation between engineers and GPUs, and why the most valuable finance teams today are deeply operational. They also unpack what it’s like partnering with AI-native founders, the evolution of pricing models as LLM costs drop, and whether we’ll see a private trillion-dollar company anytime soon.—LINKS:on LinkedIn: https://www.linkedin.com/in/sarah-wang-59b96a7/Company: https://a16z.com/CJ on X (@cjgustafson222): https://x.com/cjgustafson222Mostly metrics: https://www.mostlymetrics.com—RELATED EPISODES:996 Culture, Exploding AI Bills & SaaS ChaosFrom Credit Karma to Notion: CFO Rama Katkar on Leading Finance Through Every Growth Stage5,762 Job Applications. Zero Offers.Thinking About Adding Payments to Your Software Product? Listen to This First!—TIMESTAMPS:(00:00:00) Preview and Intro(00:02:40) Sponsors – Fidelity Private Shares, Mercury, RightRev(00:05:50) Sarah Joins the Show(00:06:06) The Future of Excel in the Age of AI(00:08:24) Why Gross Margins Don’t Tell the Whole Story(00:10:42) When Sky-High Margins Are an Orange Flag(00:12:57) Finance as a Strategic Lever in AI Companies(00:15:04) Sponsors – Tipalti, Aleph, Rillet(00:17:22) Partnering with AI-Native Founders(00:20:35) When Traditional SaaS Benchmarks Break Down(00:23:58) Forecasting and Financial Planning for Compute Costs(00:27:16) The Engineers-Versus-GPUs Trade-Off(00:30:29) Resource Allocation and Infrastructure Efficiency(00:33:47) How Pricing Models Evolve as LLM Costs Drop(00:37:15) Circular Finance: When Big Tech Funds Its Own Vendors(00:40:39) Metrics That Still Matter in AI-Driven Businesses(00:44:12) The Evolving Role of Finance Leaders(00:47:26) What “Operational Finance” Really Means(00:50:58) Building Sustainable Efficiency in AI Companies(00:54:03) Will We See a Private Trillion-Dollar Company?(00:55:33) Outro—SPONSORS:Fidelity Private Shares is the all-in-one equity management platform that keeps your cap table clean, your data room organized, and your equity story clear—so you never risk losing a fundraising round over messy records. Schedule a demo at https://www.fidelityprivateshares.com and mention Mostly Metrics to get 20% off.Mercury is business banking built for builders, giving founders and finance pros a financial stack that actually works together. From sending wires to tracking balances and approving payments, Mercury makes it simple to scale without friction. Join the 200,000+ entrepreneurs who trust Mercury and apply online in minutes at https://www.mercury.comRightRev automates the revenue recognition process from end to end, gives you real-time insights, and ensures ASC 606 / IFRS 15 compliance—all while closing books faster. For RevRec that auditors actually trust, visit https://www.rightrev.com and schedule a demo.Tipalti automates the entire payables process—from onboarding suppliers to executing global payouts—helping finance teams save time, eliminate costly errors, and scale confidently across 200+ countries and 120 currencies. More than 5,000 businesses already trust Tipalti to manage payments with built-in security and tax compliance. Visit https://www.tipalti.com/runthenumbers to learn more.Aleph automates 90% of manual, error-prone busywork, so you can focus on the strategic work you were hired to do. Minimize busywork and maximize impact with the power of a web app, the flexibility of spreadsheets, and the magic of AI. Get a personalised demo at https://www.getaleph.com/runRillet is the AI-native ERP modern finance teams are switching to because it’s faster, simpler, and 100% built for how teams operate today. See how fast your team can move. Book a demo at https://www.rillet.com/metrics#RunTheNumbersPodcast #FinanceLeadership #AIinBusiness #VentureCapital #SaaSMetrics This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit cjgustafson.substack.com

Dive into 'sloponomics,' a quirky exploration of the flood of mediocre AI-generated content. Discover how unique voices can thrive in a noisy landscape. The hosts discuss the implications of AI on crediting creators and the economics of content production. They tackle the $10K MRR meme and its significance in startup growth. Unpack pricing psychology and customer targeting strategies likened to hunting animals. Plus, hear personal anecdotes about quitting social media and trying an electric boat!

In this discussion, Michael Stanisz, Partner at Revenue Management Labs, reveals the shifting landscape of software pricing in the era of AI. He highlights how variable costs and usage-based models challenge traditional SaaS economics. Listeners will learn about commoditization of features, the significance of telemetry for pricing strategies, and the complications of outcome-based pricing. Michael shares insights on avoiding pricing pitfalls and the surprising value of on-prem customers, while recounting amusing anecdotes about outdated business practices.

Brandon Sullivan, CFO at 2X, brings a wealth of experience bridging finance and marketing in a 1,200-person firm. He dives into the messy reality of measuring marketing ROI and how spreadsheet reliance can lead to erroneous decisions. He discusses the cultural clash between CFOs and CMOs and emphasizes the importance of aligning their goals. Sullivan shares insights on nurturing global teams, why cutting marketing spend can hurt long-term growth, and the game-changing role of AI in attribution. He also highlights the necessity of curiosity and adaptability in the CFO role.

The hosts tackle the intriguing question of whether we are in an AI bubble, examining the intricate financial ties between Nvidia, OpenAI, and startups. They share entertaining stories of AI's successes and failures in real-world applications, particularly when automation mishaps occur. The debate heats up around AI resume screening and the implications for hiring practices. Plus, they discuss how AI adoption might be slowing down and analyze the clever monetization strategies emerging in this rapidly evolving space.

In this discussion, Ivan Makarov, Operating Partner at Andreessen Horowitz and former VP of Finance at Webflow, shares invaluable insights on building finance functions in startups. He highlights critical points like when to transition from outsourcing to hiring in-house finance, the evolving role of early finance hires, and the importance of cash management. Ivan also warns against common fundraising pitfalls and emphasizes the need for strong audit readiness. Plus, he dives into how modern finance tools enhance operations and the necessity of protecting against fraud.

Joe Floyd, General Partner at Emergence Capital, dives into the reshaping of the venture landscape due to AI. He discusses the phenomenon of acqui-hires and the high salaries for AI engineers, dubbed 'boy band money.' The conversation explores the dynamic shifts in SaaS playbooks as AI lowers product-market fit barriers. Floyd also highlights the fiscal challenges of AI-native startups, such as negative gross margins, and speculates on the potential for a trillion-dollar private company emerging from this wave.

Get ready for conference season with tips on nailing your keynote speech—like choosing the perfect walkout song! Discover what AI startups are really spending money on and the struggles of measuring AI ROI. The hosts dive into SaaS pricing strategies, including bundling AI features for higher prices. They also discuss quirky insights from late-night reads on sports and economics. Plus, hear about the fascinating architectural history behind Amsterdam's narrow houses and its relation to pricing dynamics.

Scott Voss, Managing Partner at HarbourVest, explores the evolving landscape of private and public markets. He highlights the rise of mega ventures like SpaceX, contrasting them with traditional firms. Voss dives into the surge of take-private deals, explaining the strategic pivot companies make when escaping quarterly pressures. He discusses the vital role of private credit as a market player and its implications for liquidity. Lastly, he sheds light on how AI deals are reshaping investment strategies, marking an exciting new phase in private equity.

Rama Katkar, the CFO of Notion and former finance leader at Credit Karma and Instacart, discusses building modern finance functions in fast-growing tech companies. She dives into Notion’s innovative pricing strategies and the importance of nurturing free users to drive growth. Rama shares insights on navigating M&A during turbulent times and outlines her forecasting framework for product-led growth. She emphasizes aligning product metrics with financial outcomes and the value of clear storytelling in finance.