⚙ Hi {{first_name_tally|Operator}},

SaaS founders brag about 80% gross margins.

AI founders don’t get that luxury.

One spike in usage and your best customer turns unprofitable.

Stop benchmarking against SaaS. Start thinking like a grocer.

- Rameel

Sent me your funniest work meme’s or videos.

Funniest one gets a shoutout in next’s weeks newsletter.

If your AI startup's token waste hits zero, you're screwed. Just ask the grocery stores running empty shelves to hit efficiency targets while customers walk out the door. 

When building an AI product, stop using SaaS as your benchmark. SaaS companies got used to running at 70–80% gross margins, where shaving off another percent was just extra cash in the bank. AI companies don't live in that world. They're lucky to scrape 40–50%. One spike in usage and your best customer suddenly turns unprofitable.

Use retailers as a comp instead.

Retailers lose 2–3% of sales to shrink every year — spoiled milk customers can't drink, stolen cigarettes, candy bars that melt before anyone buys them. But if shrink ever drops to zero, it's not a win. It means shelves are empty and customers are walking out the door.

AI has the same dynamic. Token wastage isn't a bug but the cost of customer delight.

I learned this watching my family's gas station bleed customers because we hired the wrong manager.

She came from corporate retail with optimization spreadsheets and zero-waste targets. Her first move was to cut inventory orders by 20%. "We're hemorrhaging money on waste," she declared, pointing to coolers full of refrigerated products approaching expiration.

Within six weeks, our best regular — a contractor who bought $200 worth of drinks and snacks weekly for his crew — told us he couldn't count on us anymore. Half the time we were out of energy drinks. The other half, our coffee was stale because we weren't brewing enough to keep it fresh.

Shrink fell to 0.8% of sales. We'd "solved" waste and lost $3,000 in weekly revenue.

When customers can't get what they came for, the real losses start.

Your AI startup faces the same trade-off, just with tokens instead of milk.

Your autocomplete feature fires five OpenAI calls for every character typed. Users never see four of them, but they feel the instant response. That 80% waste rate is what makes typing feel magical instead of laggy.

Your search feature burns 2,000 tokens to serve 500 tokens of results before the user even finishes their query. Two get thrown away, but the one they want appears instantly. Pure waste that creates pure delight.

Your chat interface retries failed API calls automatically, burning extra tokens so users never see error messages. Wasteful? Absolutely. But customers trust the experience enough to keep using it.

This is token shrink. And just like grocers keeping shelves stocked, you can't eliminate it without killing what customers actually pay for.

Smart AI operators bake token waste into the experience design.

Real-time features that pre-generate responses users might never click. Content moderation that occasionally flags harmless queries but protects brand trust. Multiple model calls to guarantee reliability, even when the first one works fine.

Each looks wasteful in isolation. Together they create the speed, safety, and reliability that customers actually pay for.

Cut the "waste" and your product feels brittle. Users notice when features lag. Enterprise customers churn when demos glitch. The CFO celebrates lower AWS bills while revenue evaporates.

Your CFO sees the infrastructure bills and demands answers.”'Why are we burning tokens on queries?”.

Because those invisible tokens are what makes your demo feel instant instead of janky. That's their job. But explain why some waste signals strength.

Zero waste means customers aren't exploring enough to find value. It means your experience is too brittle for users to trust with important tasks. It means you've optimized away the abundance that makes products feel magical.

Token waste isn't inefficiency — it's investment in customer experience. The question isn't how to eliminate it, but how much you can afford.

Excellence isn't zero waste. It's right-sized waste your customers never notice

Because in AI, just like groceries, waste is proof your shelves are stocked and your customers trust you enough to keep reaching for more.