CPO Feature Margin Floor (70% Rule)
The CPO Feature Margin Floor is a governance standard mandating that all AI features yield at least 70% gross margin.
“If power users reduce your company cash flow, your pricing model is broken. Enforce the 70% margin floor.”
Prevents power-user accounts from eroding enterprise SaaS gross profits and protects company exit valuation multiples from token COGS inflation.
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CPO Feature Margin Floor (70% Rule)
The CPO Feature Margin Floor is a governance standard mandating that all AI features yield at least 70% gross margin.
Direct Relationships (1)
Transitive Neighbors (Connected via Hop 1)
Extended Causal Ripple Effects
Richard Ewing’s Research Thesis
SaaS companies that sell variable reasoning compute on fixed seats are transferring margin to foundation model providers.
What Changes If You Believe This?
Engineering teams implement token telemetry and per-customer rate limiters.
Finance gains guaranteed 70%+ gross margin floors on all AI customer tiers.
Product teams prune negative-carry features and transition to consumption pricing.
Security enforces bounded execution quotas on all model calls.
Recommended Action by Role
Require affirmative gross margin modeling before signing off on any AI PRD.
CPO AI Feature Margin Matrix
Evaluates feature gross margins and models outcome-based pricing.
Frequently Asked Questions
Q:What is the CPO Feature Margin Floor?
A governance policy requiring all AI features to maintain >= 70% gross margin under peak usage.
Canonical Specification Origin
AI features require direct gross margin bounding to protect SaaS profitability.
Corpus Interconnections
Richard Ewing artifacts developed around this canonical framework, including publications, execution tools, and diagnostic models.
External Adoption & Peer Citations
Documented instances where independent researchers, engineering teams, and publications have cited, implemented, or referenced this concept outside Richard Ewing’s ecosystem.
External Evidence: No independently verified references recorded yet.
This concept is part of Richard Ewing’s original baseline canon. External citations and implementations are added only upon rigorous empirical verification.
Inspectable Evidence Ledger
Classified evidence items supporting, extending, or refining this canonical research specification.
| Evidence Item | Publisher | Evidence Type | Strength | Role | Action |
|---|---|---|---|---|---|
| The 3 Financial Metrics Every PM Needs on Their Scorecard | Mind the Product | Canonical Essay | ★★★★★ | Origin | Inspect ↗ |
Recommended Citation
Ewing, R. (2026). "CPO Feature Margin Floor (70% Rule)." Richard Ewing Research Canon. Available at: https://www.richardewing.io/concepts/cpo-feature-margin-floor
@article{ewing_cpo_feature_margin_floor,
author = {Ewing, Richard},
title = {CPO Feature Margin Floor (70% Rule)},
journal = {Richard Ewing Research Canon},
year = {2026},
url = {https://www.richardewing.io/concepts/cpo-feature-margin-floor}
}