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Questioning Margins is a Boring Cliche… | Andreessen Horowitz

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Every computing epoch has brought a slew of articles and posts decrying that the leading businesses were untenable due to low margins. This was an oft-used critique of web companies (Amazon and Netflix of particular note), mobile (Uber and Doordash popular targets), generative AI models, and now more recently, apps built on top of foundation models. While these pieces are broadly penned, a common and particularly puzzling source of the negativity is investors. We’ll never understand why an investor would be comfortable disparaging startups, or offering general pessimism about innovation waves. However, the pieces do tend to get a lot of visibility, and as a result, are a relatively cheap win for clicks. The problem is that they’re quite often wrong, or at best short-sighted, and using them as investment guidance would have resulted in passing on many of the largest winners in tech history. In this post, we address some of the ill-informed chatter about gross margins in AI app companies

Questioning Margins is a Boring Cliche… | Andreessen Horowitz Growth Questioning Margins is a Boring Cliche… Sarah Wang and Martin Casado Posted August 21, 2025 Subscribe Share Share Email X LinkedIn Facebook Hacker News WhatsApp Flipboard Reddit Questioning Margins is a Boring Cliche… Table of Contents Share Share Email X LinkedIn Facebook Hacker News WhatsApp Flipboard Reddit Every computing epoch has brought a slew of articles and posts decrying that the leading businesses were untenable due to low margins. This was an oft-used critique of web companies (Amazon and Netf

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