How are foundation model routing and commodity pricing impacting enterprise application startups?
Replied byJason Lemkin
Founder & CEO at SaaStr
Niche: SaaS
Revenue: Approx. USD 2.5 Million/month
Location: Palo Alto, California, United States
Started: 2012
Startups are ruthlessly routing inference traffic between OpenAI, Anthropic, and open-source models based purely on cost per token and latency. Because developer loyalty to specific model APIs is near zero, application companies that lack proprietary enterprise workflows or direct customer distribution will see their gross margins quickly eroded by compute costs.
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