Levie: Gross margins structurally dictate whether a company achieves software operating margins
Aaron Levie · BG2 with Bill Gurley, Brad Gerstner & Aaron Levie | Software Valuations, Earnings, Immigration | E02 · Bg2 Pod · Feb 8, 2024 · at 13:51
Box CEO Aaron Levie explains to Bill Gurley why gross margin is the most fundamental internal metric software founders must manage.
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“Your gross margin will ultimately determine your operating margin. There's almost no way that, that you can kind of make those two you know, kind of get out of sync. And so if you're subsidizing something or, you know, or in just such a commodity business and you're, you know, 40, 50, 60% gross margin, like there's just like, No way you're gonna have an operating margin that looks like a software company.”
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