Delian Asparouhov (@zebulgar) and @EverettRandle debated where durable power and margins show up in 2025. Software now carries real inference costs and fiercer competition and investors are funding negative gross-margin companies in AI. Delian’s contrast in this clip is that companies that start off “ugly” but evolve into defensible positions can outperform software that looks “pretty” early on but are expensive to scale. “Rippling… has an initial very high gross margin but still has to spend a lot on sales and marketing to bring in net-new customers.” “Hadrian… was deeply negative gross margin to start, but now has super limited S&M because there are only 10–15 customers that matter and once you deliver, they proactively throw revenue at you.” “In the mid-2010s a lot of investors swore off negative-GM businesses… but Uber and DoorDash invested through the pain, built local networks, and now have attractive financial profiles.” “Today money’s piling into AI apps and models where some unit economics look like ‘selling a buck for 90 cents.’”