Praying for Distribution | AI Changes the Math

Distribution spend in SaaS companies is increasingly hidden across three P&L line items—COGS (inference costs), R&D (product flywheel), and S&M (traditional GTM)—rather than concentrated in sales & marketing alone. Rising CAC payback periods (median 20 months vs. 11 months historically) and falling NRR are eroding GTM efficiency, requiring CFOs to actively manage total distribution spend across all categories rather than optimizing S&M in isolation. AI companies in particular are experimenting with inference costs as a distribution channel, fundamentally challenging the traditional gross margin-to-valuation multiple relationship.