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(I'm the post's author.) This is another great perspective on how not every dollar is equal: unlocking better pricing as your volume increases. When I wrote t

(I'm the post's author.) This is another great perspective on how not every dollar is equal: unlocking better pricing as your volume increases. When I wrote this, I was especially thinking about low-margin industries like grocery stores. For a high-margin industry (e.g. 75% margins), it doesn't really matter if you save the customer $1k or help them earn an additional $1k. Those are roughly the same to them in terms of money added to the bottom line. But if the customer's margins are more like 2% or 5%, then the difference between $1k in cost and revenue is much more dramatic to them.

cher88 9y ago
Another scenario where gaining an incremental dollar of revenue may be more valuable than saving an incremental dollar of cost: optics for fundraising. A startup with $500k revenue and $600k cost would probably find it easier to raise funds than a startup with $100k revenue and $200k cost.
- maxxxxx 9y ago
  It's also easier to optimize business processes when there is some volume. Optimizing 10% of a $10 million process is real money where doing this with a $100k process is often not worth the effort.
- lpolovets 9y ago
  That's a great point.