Harvey's negative gross margins are smart: trading margin for customer value discovery
matt_slotnick · x · 2026-09-25
Reports that legal AI startup Harvey's new products pushed gross margins negative drew backlash, but enterprise AI observer Matt Slotnick argues the play is exactly right: launch an over-provisioned agent product on frontier models to discover the shape of workloads and test customer value, with flat pricing letting customers explore use cases. Trading margin now for value discovery is a win. He adds that once you understand workload shape, you can post-train your own models to sit better on the cost-perf curve.
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