1 min lesson
Production COGS is not R&D spend
Show why this lesson detail matters: "Serving a user is COGS, it scales with usage and lands on gross margin."
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Production COGS is not R&D spendgoverned differently, reported differently
Serving a user is COGS, it scales with usage and lands on gross margin. Training a model or running an experiment is R&D, it's an investment bet governed on a different cadence with different owners. Conflating them is the fastest way to lose credibility with Finance.
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Same GPUs can serve both
- Dimension
- What it buys
- Production COGS
- Serving inference to live users
- R&D spend
- Training, fine-tuning, experiments, evals
- Dimension
- Scales with
- Production COGS
- DAU and usage intensity
- R&D spend
- Research roadmap and bet count
- Dimension
- Margin impact
- Production COGS
- Direct hit to gross margin
- R&D spend
- Operating expense / investment line
- Dimension
- Decision owner
- Production COGS
- Infra + Finance, monthly
- R&D spend
- Research leadership, per-bet
- Dimension
- The right question
- Production COGS
- Is this feature margin-accretive?
- R&D spend
- Is this bet worth the spend?
| Dimension | Production COGS | R&D spend |
|---|---|---|
| What it buys | Serving inference to live users | Training, fine-tuning, experiments, evals |
| Scales with | DAU and usage intensity | Research roadmap and bet count |
| Margin impact | Direct hit to gross margin | Operating expense / investment line |
| Decision owner | Infra + Finance, monthly | Research leadership, per-bet |
| The right question | Is this feature margin-accretive? | Is this bet worth the spend? |
Same GPUs can serve both. The accounting and the governance are not the same.