usage-based pricing

also referred to as: usage based pricing

5 statements across 4 episodes · 1 bullish · 2 bearish · 4 people on the record · first statement Dec 8, 2022 by Madhavan Ramanujam · across every show →

Everything said about usage-based pricing, oldest first

Dec 8, 2022 bullish
Insight
Economic downturns are the optimal time to transition to usage-based pricing
“Frankly, this is the best time to actually think about these things. Like if, you know, if people are not using the product, changing it to a usage-based, people would say that's great because You know, there's a downturn. We're not using the product. And they…”
Madhavan Ramanujam Dec 8, 2022 ▶ 1:31:20 The art and science of pricing | Madhavan Ramanujam (Monetizing Innovation, Simon-Kucher)
Jan 12, 2023 bearish
Insight
Pure usage pricing struggles because CFOs require predictable budgeting
“I think one challenge with purely usage-based models is that's not always how CFOs want to buy. I think buyers sometimes want predictability. They want to be able to budget for your tool.”
Naomi Ionita Jan 12, 2023 ▶ 47:08 How to price your product | Naomi Ionita (Menlo Ventures)
Jan 12, 2023
Assertion Partly supported
Only 5% of SaaS companies use pure usage-based pricing
“A small fliver, less than 10%, around roughly five percent have just pure natural escalator, kind of usage-based model. The vast majority have a hybrid approach.”
Naomi Ionita Jan 12, 2023 ▶ 46:16 How to price your product | Naomi Ionita (Menlo Ventures)
May 25, 2025 neutral
Prediction Not checkable as stated
AI agent pricing models will face a 'wild west' period before standardizing
“Especially with agents coming into the play, like how you pay for AI workers is going to be very different. You know, what is that unit of completion for things like code generators is going to be, it's going to be a wild, wild west before we come up with some…”
Krithika Shankarraman May 25, 2025 ▶ 1:01:49 Growth tactics from OpenAI and Stripe’s first marketer | Krithika Shankarraman
Jul 31, 2025 negative
Insight
Taylor: AI token consumption often fails to correlate with customer value
“I don't think, I think there's a huge difference between outcomes based pricing and usage based pricing, because especially in AI, they're not necessarily even correlated and you could have a long phone call, not solve the customer's problem. And they give you…”
Bret Taylor Jul 31, 2025 ▶ 1:07:35 He saved OpenAI, invented the “Like” button, and built Google Maps: Bret Taylor (Sierra)
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