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Agentic Product Economics & Business Models
Agent cost structures, pricing models, ROI calculation, and business model design for products where autonomous agents execute workflows — the economics of replacing human work with AI agents.
Agentic product economics are fundamentally different from traditional SaaS economics. Traditional SaaS has fixed costs (development, hosting) and marginal costs near zero per user. Agentic products have variable costs per task: every agent execution costs money — inference, tool calls, memory, and human oversight. This creates unique economics: gross margins may be lower than traditional SaaS (40-70% vs 80-90%), but the value created can be much higher (replacing human work, not just assisting it). The PM must understand these economics to design viable agentic products — products where the value of autonomous execution exceeds the cost of agent operation.
The key economic challenge is cost optimization. Agent costs can spiral: a complex workflow with multiple agents, many tool calls, and significant memory can cost dollars per task. If the value created is $10, a $2 cost is fine; if the value is $1, a $2 cost is unsustainable. Cost optimization techniques include: model routing (cheap models for simple tasks, expensive for complex), caching (reuse results), batch processing (amortize costs), and efficient tool use (minimize API calls). Products that master cost optimization achieve viable economics; those that do not face unsustainable unit economics.
For India and GCCs, agentic economics present unique opportunities. India's cost advantage extends to agentic operations — agent monitoring, oversight, and improvement at lower cost than Western teams. This makes agentic products more economically viable when operated from India. The DPI ecosystem creates unique agentic economics — agents on UPI, ONDC, and Account Aggregator can create value at scale with low per-transaction costs. Indian SaaS companies can build agentic products with cost-optimized economics that compete globally. Organizations that master agentic economics build products that are both transformative and profitable.
Agentic Product Economics and Business Models encompass the cost structures, pricing strategies, ROI calculations, and business model designs for products where autonomous AI agents execute workflows. It includes agent cost analysis (inference, tools, memory, oversight), pricing models (per-task, per-outcome, subscription, hybrid), ROI calculation (agent cost vs human cost vs value created), cost optimization (model routing, caching, efficiency), and business model design (how agentic products create, deliver, and capture value). The goal is agentic products that are both transformative and economically viable.
Agentic economics matter because they determine whether agentic products are viable. Traditional SaaS can survive with high costs because marginal costs are near zero — scale solves economics. Agentic products have variable costs per task — if costs exceed value, scale makes things worse, not better. The PM must design economics that work at unit level: each task must create more value than it costs. Products with poor unit economics fail regardless of product quality — the 95% GenAI pilot failure rate (MIT NANDA) includes economics failures where agent costs exceeded value created.
The stakes are high because agentic economics are complex and unforgiving. Agent costs can spiral through: model selection (expensive models for simple tasks), tool overuse (unnecessary API calls), memory bloat (storing unnecessary context), and oversight burden (too much human review). Each cost driver can make products uneconomic. Organizations that master agentic economics build sustainable products; organizations that do not face unsustainable costs that destroy profitability. The economics determine whether agentic products can scale — and scaling uneconomic products amplifies losses.
For India and GCCs, agentic economics are a strategic advantage. India's cost advantage makes agent operations more viable — oversight, monitoring, and improvement at lower cost. The DPI ecosystem enables low-cost, high-volume agentic products. Indian SaaS companies can build cost-optimized agentic products that compete globally. Organizations that master agentic economics build products that are both transformative and profitable — the winning combination for sustainable agentic product success.
Agentic product economics have evolved from simple API cost models to sophisticated multi-dimensional cost structures.
| Era | Cost Model | Primary Costs | Pricing Approach | Margin Profile |
|---|---|---|---|---|
| API Era (pre-2020) | Per-API-call | API calls, hosting | Per-call pricing | High (80%+) |
| AI API Era (2020-2022) | Per-token | Model inference, API calls | Per-token pricing | Medium-high (60-80%) |
| Copilot Era (2023-2024) | Per-interaction | Inference, context, tools | Subscription + usage | Medium (50-70%) |
| Early Agent Era (2024-2025) | Per-task | Inference, tools, memory, oversight | Per-task or subscription | Medium (40-70%) |
| Agentic Products (2025-2026) | Per-outcome | Full agent stack, oversight, improvement | Outcome-based, hybrid | Variable (30-70%) |
| Autonomous Systems (2026-2028) | Value-share | Full autonomous operation | Value-share, outcome-based | Variable (20-60%) |
Agentic economics are built on six foundational concepts that together determine product viability.
Agent costs include: inference (model API calls), tool calls (external API costs), memory (vector DB, context storage), oversight (human review time), and infrastructure (hosting, monitoring). Total cost per task is the sum of all these. Understanding the cost structure enables optimization — which costs are significant and how to reduce them.
Agentic products create value by: replacing human work (cost savings), enabling new capabilities (new value), improving quality (error reduction), and increasing speed (time savings). The value created must exceed the agent cost — this is the fundamental viability equation. Different value types have different economic profiles.
Agentic pricing models: per-task (charge per agent execution), per-outcome (charge per successful result), subscription (flat fee for usage), hybrid (base + usage), and value-based (share of value created). The choice depends on value type, usage pattern, and customer preference. Outcome-based pricing aligns incentives but is harder to implement.
Agent ROI = (Value Created - Agent Cost) / Agent Cost. Value created includes: human cost saved, new value enabled, quality improvement, time savings. Agent cost includes: all operational costs. Positive ROI is necessary for viability; high ROI enables scaling. ROI must be calculated per task and aggregated for portfolio assessment.
Techniques to reduce agent costs: model routing (cheap models for simple tasks), caching (reuse results), batch processing (amortize fixed costs), efficient tool use (minimize API calls), context optimization (minimize memory), and oversight optimization (minimize human review). Cost optimization can reduce costs by 50-80% without sacrificing quality.
How agentic products create, deliver, and capture value: creation (autonomous execution replaces human work), delivery (agents operate 24/7 at scale), capture (pricing models that align with value). Agentic business models differ from traditional SaaS — variable costs, outcome-based value, and automation economics.
Understanding when autonomous agents create more economic value than AI copilots.
| Dimension | AI Copilot | Autonomous Agent | Economic Implication |
|---|---|---|---|
| Execution | AI assists, human executes | Agent executes autonomously | Agent replaces human cost |
| Cost per Task | AI cost + human cost | Agent cost + oversight cost | Agent can be cheaper if oversight is low |
| Value per Task | Incremental improvement | Transformative automation | Agent creates more value |
| Scalability | Limited by human time | Scales with agent capacity | Agent scales better |
| Quality | Human + AI quality | Agent quality (variable) | Copilot may be higher quality |
| Best For | High-judgment tasks | Routine, well-defined tasks | Different economics for different tasks |
| Margin Profile | Higher (less variable cost) | Lower (more variable cost) | Copilot has better margins, agent more value |
| Business Model | Subscription (per user) | Usage or outcome-based | Different pricing models |
Different pricing models for agentic products with distinct trade-offs.
| Model | How It Works | Best For | Risk | Margin |
|---|---|---|---|---|
| Per-Task | Charge per agent execution | Clear, measurable tasks | Low value tasks unprofitable | Medium (50-70%) |
| Per-Outcome | Charge per successful result | Measurable outcomes | Agent failure = no revenue | Variable (40-70%) |
| Subscription | Flat fee for usage | Predictable usage | Heavy users unprofitable | Medium-high (60-80%) |
| Hybrid | Base + usage | Mixed usage patterns | Complexity in pricing | Medium (50-70%) |
| Value-Based | Share of value created | High-value automation | Value measurement challenges | Variable (30-60%) |
| Platform | Take rate on transactions | Marketplace agents | Chicken-and-egg adoption | High at scale (60-80%) |
How costs accumulate in an agent execution.
User request triggers agent inference (model API cost). Agent makes tool calls (external API costs). Agent performs memory operations (vector DB, context storage costs). Human oversight reviews results (human time cost). Result is delivered to user. All costs are aggregated per task. ROI is calculated: value created minus total cost. Understanding this flow enables cost optimization at each step.
How agentic products create and capture value.
Identify workflows suitable for agentic automation. Analyze current human cost (time, salary, errors). Analyze agent cost (inference, tools, oversight). Calculate value created (human cost saved + new value). Design pricing that captures fair share of value. Capture revenue through pricing model. Analyze profit (revenue minus agent cost). Understand scale economics (how costs and value change with volume).
| Component | Function | Technology | PM Responsibility |
|---|---|---|---|
| Cost Tracking System | Tracks all agent costs per task | Cost logging, analytics, dashboards | Monitor costs, identify optimization |
| Model Router | Routes tasks to optimal cost-quality model | Model routing, capability assessment | Configure routing, optimize costs |
| Caching Layer | Caches results to reduce redundant calls | Redis, vector DB, custom caching | Design cache strategy, manage TTLs |
| Pricing Engine | Calculates prices based on model | Pricing rules, usage tracking, billing | Design pricing, manage models |
| ROI Calculator | Calculates ROI per task and portfolio | Value tracking, cost aggregation, analytics | Monitor ROI, optimize economics |
| Oversight Cost Tracker | Tracks human oversight costs | Time tracking, review logging | Monitor oversight, optimize review |
| Value Measurement | Measures value created by agents | Outcome tracking, value attribution | Define value metrics, measure outcomes |
| Billing System | Bills customers based on pricing model | Billing platform, invoicing, payments | Manage billing, ensure accuracy |
Agentic economics require comprehensive data architecture for cost tracking, value measurement, and ROI calculation.
Agent executions generate cost events (inference, tools, memory, oversight) and value events (outcomes, savings, new value). Costs are aggregated per task, per user, per workflow. Value is aggregated similarly. ROI is calculated per task and aggregated for portfolio analysis. Pricing is applied based on the model. Revenue is recognized based on pricing and usage. The architecture must support real-time cost tracking and accurate value measurement.
| Data Type | Source | Volume | Retention | PM Responsibility |
|---|---|---|---|---|
| Cost Events | Every cost-generating action | Very high (per action) | 2 years (for analysis) | Monitor costs, optimize spending |
| Value Events | Outcomes and savings from agents | High (per outcome) | 2 years (for ROI analysis) | Measure value, calculate ROI |
| Usage Data | How customers use the product | High (per interaction) | 2 years (for pricing) | Analyze usage, optimize pricing |
| Revenue Data | Billing and payment records | Medium (per transaction) | 7 years (for compliance) | Track revenue, ensure accuracy |
| ROI Aggregates | ROI per task, user, portfolio | Medium (aggregated) | 2 years (for trends) | Monitor ROI, optimize economics |
The AI layer for agentic economics uses AI to optimize costs, predict value, and manage pricing.
| AI Capability | Role in Agentic Economics | Technology | PM Considerations |
|---|---|---|---|
| Cost Prediction | Predicts agent costs for tasks | Cost modeling, usage forecasting | Validate predictions, optimize routing |
| Value Prediction | Predicts value created by agents | Outcome prediction, value modeling | Validate predictions, ensure accuracy |
| Model Routing | Routes tasks to optimal cost-quality model | Capability assessment, cost optimization | Configure routing, monitor quality |
| Pricing Optimization | Optimizes pricing for revenue and adoption | Pricing analytics, demand modeling | Review recommendations, test pricing |
| Oversight Optimization | Optimizes human oversight allocation | Risk prediction, review routing | Balance oversight cost and safety |
| ROI Optimization | Optimizes overall ROI across portfolio | Portfolio optimization, ML | Review recommendations, ensure viability |
Enterprise organizations use agentic economics to build viable autonomous products.
Enterprises analyze agent economics across products: cost structures, value creation, ROI, and pricing. Microsoft analyzes Copilot agent economics across Office, Azure, Dynamics.
Enterprises optimize agent costs: model routing across enterprise tasks, caching at scale, batch processing for enterprise volume, and oversight optimization. Enterprise cost optimization can reduce costs by 60-80%.
Enterprises design pricing for agentic products: per-seat for copilots, per-task for agents, enterprise agreements for volume. Enterprise pricing must align with value creation and customer budget cycles.
Enterprises govern agent ROI: minimum ROI thresholds, portfolio ROI analysis, and regular economic review. Products below ROI thresholds are improved or sunset. ROI governance ensures economic sustainability.
Enterprises measure value created by agents: cost savings, productivity gains, quality improvements, and new capabilities. Value measurement enables ROI calculation and pricing justification.
Enterprises design business models for agentic products: how they create, deliver, and capture value. Enterprise agentic business models may include platform plays, ecosystem value, and outcome-based contracts.
| Industry | Agentic Economics Application | Business Impact |
|---|---|---|
| SaaS | Agent cost optimization and outcome pricing | 60% margin improvement for agentic features |
| BFSI | Agent ROI for financial workflow automation | 70% cost reduction vs human processing |
| Healthcare | Agent economics for clinical documentation | 50% reduction in documentation costs |
| E-commerce | Agent pricing for inventory and customer service | 40% improvement in operational margins |
| Enterprise Software | Agent economics for IT operations | 60% reduction in IT operational costs |
| Media & Entertainment | Agent economics for content creation | 50% reduction in content production costs |
India presents unique agentic economics opportunities, with cost advantages and DPI creating distinct possibilities.
India's cost advantage extends to agent operations: oversight, monitoring, and improvement at lower cost than Western teams. This makes agentic products more economically viable when operated from India.
UPI, ONDC, Account Aggregator enable low-cost, high-volume agentic products. Agents on DPI can create value at scale with low per-transaction costs — unique economics not available in other markets.
India's 22 official languages create opportunities for vernacular agents that serve underserved markets at lower cost. Vernacular agents can capture value that English-only global agents miss.
Zoho, Freshworks, Postman build agentic products with cost-optimized economics — India-based development and operations reduce costs, making agentic features more viable.
India's 1,500+ GCCs can build agentic products with cost-optimized economics for global parent organizations — cost advantage makes autonomous products more viable.
India's diverse population creates opportunities for inclusive agents that serve massive underserved markets at low cost. Inclusive agent economics enables serving users that high-cost Western agents cannot profitably serve.
The global landscape for agentic economics is characterized by evolving cost structures and pricing models.
| Region | Agentic Economics Maturity | Key Characteristics | Leading Examples |
|---|---|---|---|
| United States | Very High | AI-native companies, sophisticated economics | OpenAI, Anthropic, Microsoft, Google, Sierra |
| China | High | Scale-driven economics, government support | Baidu, Alibaba, Tencent, ByteDance |
| Europe | High | Value-based economics, regulatory focus | DeepMind, Mistral AI, SAP, Hugging Face |
| India | Growing | Cost-advantaged, DPI-enabled, inclusive | Zoho, Freshworks, GCC AI CoEs |
| Southeast Asia | Emerging | Mobile-first agent economics, diverse markets | Grab, Gojek, Sea Group |
| Middle East | Growing | Sovereign AI economics, government adoption | G42, Core42, STC |
GCCs in India are positioned to build agentic products with cost-optimized economics for global markets.
GCCs building Agent Economics Centers of Excellence with capabilities in cost optimization, value measurement, and pricing strategy — enabling viable autonomous products.
India's cost advantage enables cost-optimized agent operations — oversight, monitoring, and improvement at lower cost, making agentic products more economically viable.
GCCs design economics for global agentic products — accounting for diverse market economics, pricing expectations, and value perceptions across regions.
GCCs enable round-the-clock agent operations with distributed teams — oversight and monitoring available regardless of time zone, improving agent reliability and economics.
The following case studies illustrate how organizations designed viable agentic product economics.
Problem: Building economically viable agentic customer service products
Technology: Outcome-based pricing, cost-optimized agent stack, model routing, caching, efficient oversight, value measurement
Outcomes: Agentic customer service with 70-90% cost reduction vs human agents, viable unit economics, outcome-based pricing aligned with customer value, profitable at scale
Lessons: Outcome-based pricing aligns incentives; cost optimization is essential for viability; model routing reduces costs significantly; oversight optimization improves margins; value measurement enables pricing
Problem: Building economically viable Copilot agents across enterprise products
Technology: Enterprise agent economics, per-seat + usage pricing, cost optimization at scale, enterprise value measurement, ROI governance
Outcomes: Copilot agents with viable enterprise economics, per-seat pricing with usage components, cost optimization enabling profitability, enterprise ROI justification
Lessons: Enterprise agent economics requires value measurement; per-seat + usage balances predictability and fairness; cost optimization at scale is essential; ROI governance ensures sustainability
Problem: Building economically viable Zia agents across 55+ applications with cost constraints
Technology: Suite-wide agent economics, cost-optimized operations from India, vernacular agent economics, value-based pricing for diverse markets
Outcomes: Zia agents with cost-optimized economics, India-based operations reducing costs, vernacular agents serving diverse markets, viable economics across comprehensive suite
Lessons: Cost-optimized operations enable more agentic products; India-based economics create global advantage; vernacular agents serve underserved markets; suite-wide economics create ecosystem value
Problem: Building economically viable agentic products from foundation models
Technology: Agent SDK economics, usage-based pricing, cost optimization through model routing, value-based pricing for enterprise, outcome measurement
Outcomes: Agentic products with viable economics, usage-based pricing aligning with value, cost optimization through model selection, enterprise value-based pricing, profitable agent operations
Lessons: Usage-based pricing aligns with agent costs; model routing is essential for cost optimization; value-based pricing captures fair share; outcome measurement enables pricing justification
| Phase | Timeline | Key Activities | Success Metrics |
|---|---|---|---|
| Phase 1: Cost Analysis | Weeks 1-2 | Analyze agent cost structure, identify cost drivers, benchmark | Cost structure understood, drivers identified |
| Phase 2: Value Measurement | Weeks 3-4 | Measure value created, calculate ROI, design pricing | Value measured, ROI calculated, pricing designed |
| Phase 3: Cost Optimization | Weeks 5-6 | Implement model routing, caching, oversight optimization | Costs optimized by 50-70% |
| Phase 4: Pricing Implementation | Weeks 7-8 | Implement pricing, launch billing, monitor economics | Pricing operational, economics monitored |
LAB 18: Designing Economics for Your Agentic Product
Design complete economics for a real agentic product, from cost analysis to pricing to ROI
- Identify the agent workflows in your product and analyze the cost structure for each (inference, tools, memory, oversight)
- Calculate the current cost per task — what are the major cost drivers?
- Analyze the value created per task — what human cost is saved, what new value is enabled?
- Calculate ROI per task — is the value greater than the cost?
- Design cost optimization: model routing, caching, batch processing, oversight optimization — how much can you reduce costs?
- Design pricing: per-task, per-outcome, subscription, hybrid, or value-based — which model fits your product?
- Calculate the margin at your pricing — is it sustainable?
- Design the business model: how does your agentic product create, deliver, and capture value?
Deliverables: Cost analysis, value measurement, ROI calculation, cost optimization plan, pricing design, margin analysis, business model design
| KPI | Description | Target |
|---|---|---|
| Cost per Task | Total agent cost per task executed | < $0.50/task |
| Value per Task | Value created per agent task | > $5.00/task |
| ROI per Task | Return on investment per agent task | > 500% |
| Gross Margin | Revenue minus agent costs as percentage of revenue | > 60% |
| Cost Optimization Rate | Percentage cost reduction from optimization | > 50% |
| Pricing Alignment | How well pricing aligns with value created | > 80% alignment |
| Oversight Cost Ratio | Oversight cost as percentage of total agent cost | < 20% |
| Unit Economics Viability | Percentage of tasks with positive unit economics | > 95% |
| Risk | Probability | Impact | Mitigation |
|---|---|---|---|
| Cost Spiral | High | High | Cost tracking, model routing, caching, usage limits, optimization |
| Negative ROI | Medium | Critical | Value measurement, ROI calculation, pricing adjustment, cost optimization |
| Pricing Misalignment | Medium | High | Value-based pricing, customer research, pricing experiments |
| Oversight Cost Overrun | Medium | Medium | Oversight optimization, progressive autonomy, efficient review |
| Model Cost Inflation | Medium | Medium | Model routing, open-source models, cost forecasting |
| Value Measurement Failure | Medium | High | Clear value metrics, outcome tracking, attribution analysis |
| Scale Economics Failure | Low | High | Unit economics validation, cost scaling analysis, pricing review |
| Competitive Pricing Pressure | Medium | Medium | Value differentiation, cost advantage, pricing flexibility |
Agentic economics governance ensures products are viable, sustainable, and aligned with value creation.
Cross-functional board (CFO, CPO, CTO) that reviews agentic economics, approves pricing, and ensures viability. The board prevents uneconomic products from scaling.
Policies for ROI: minimum ROI thresholds, portfolio ROI analysis, regular economic review. Products below thresholds are improved or sunset. ROI governance ensures economic sustainability.
Policies for pricing: pricing approval process, value alignment requirements, competitive analysis. Pricing governance ensures pricing is fair, competitive, and sustainable.
Policies for cost management: cost budgets, optimization requirements, cost review. Cost governance prevents cost spirals and ensures efficient operations.
Policies for value measurement: what value to measure, how to measure it, how to attribute it. Value measurement governance ensures accurate ROI calculation.
Policies for business model design: how products create, deliver, and capture value. Business model governance ensures sustainable value creation.
Agentic economics security protects cost data, pricing data, and value measurements from manipulation.
Cost data (agent costs, pricing, margins) is business-sensitive — protection from competitors and unauthorized access is essential.
Pricing algorithms and strategies are competitive assets — protection from theft and manipulation ensures competitive advantage.
Value measurements must be accurate and tamper-proof — manipulation could misrepresent ROI and lead to bad decisions.
Billing systems handle financial transactions — security is critical for revenue protection and customer trust.
ROI data reveals product economics — protection from unauthorized access prevents competitive intelligence gathering.
Cost optimization strategies (model routing, caching) are competitive advantages — protection ensures sustained cost advantage.
The 2026 landscape shows agentic economics becoming more sophisticated, with outcome-based pricing and cost optimization maturing.
| Trend | Maturity (2026) | Enterprise Adoption | 2030 Potential |
|---|---|---|---|
| Outcome-Based Pricing | Early Production | AI leaders | Standard for agentic products |
| Model Routing | Production | AI-native companies | Standard cost optimization |
| Cost Optimization | Production | AI leaders | Standard practice |
| Value-Based Pricing | Emerging | Pioneers | Standard for high-value agents |
| AI-Assisted Cost Optimization | Early | AI leaders | Standard tool |
| Autonomous Pricing | Concept | None yet | Standard for leading companies |
| Ecosystem Economics | Emerging | Platform companies | Standard for platform agents |
By 2027, outcome-based pricing will be standard for agentic products. Cost optimization through model routing and caching will be standard practice. Products with poor unit economics will fail regardless of product quality.
By 2028-2029, AI-assisted cost optimization will emerge — AI that automatically optimizes agent costs. Value-based pricing will become standard for high-value agents. The PM role shifts from manual cost management to strategic oversight of AI-optimized economics.
By 2030, agentic economics will be a formal discipline with dedicated frameworks. Autonomous pricing will emerge for leading companies. Products without viable economics will not scale or survive.
The cost structures, pricing strategies, ROI calculations, and business model designs for products where autonomous AI agents execute workflows.
The components of agent costs: inference, tool calls, memory, oversight, and infrastructure — the sum is total cost per task.
Charging customers per successful result rather than per execution — aligns agent incentives with customer success.
Sending tasks to the optimal model based on cost-quality trade-off — the single most impactful cost optimization.
Return on investment per agent task: (Value Created - Agent Cost) / Agent Cost — must be positive for viability.
Charging a share of the value created by agents — aligns pricing with value and captures fair share.
The economics of a single unit (task) — revenue minus cost per task. Must be positive for viability; scale amplifies unit economics.
Techniques to reduce agent costs: model routing, caching, batch processing, efficient tool use, oversight optimization.
The cost of human review of agent actions — often 10-30% of total agent cost, optimizable through progressive autonomy.
Measuring value created by agents: human cost saved, new value enabled, quality improvement, time savings.
How agentic products create, deliver, and capture value — different from traditional SaaS due to variable costs and outcome-based value.
Policies ensuring agentic products are viable: ROI thresholds, pricing governance, cost governance, value measurement governance.
- Agentic economics are fundamentally different from traditional SaaS — variable costs per task require positive unit economics at task level, not just at scale.
- Agent cost structure includes inference, tool calls, memory, oversight, and infrastructure — understanding each enables targeted optimization.
- Cost optimization through model routing, caching, and efficient operations can reduce costs by 50-80% without sacrificing quality.
- Outcome-based and value-based pricing align agent incentives with customer success — becoming standard for agentic products.
- ROI calculation (value created vs agent cost) is essential — products with negative ROI cannot scale profitably regardless of product quality.
- India and GCCs have cost advantages in agent operations — oversight, monitoring, and improvement at lower cost makes agentic products more viable.
- Economics governance (ROI thresholds, pricing governance, cost governance) ensures sustainable agentic products.
- By 2027, outcome-based pricing and cost optimization will be standard. Products with poor economics will not scale or survive.
