Hudack: Price AI by heavily discounting total labor and emotional damage saved
Mike Hudack · The framework for building AI startups from a product design genius · Dec 18, 2024 · at 34:47
Mike Hudack, CEO of Sling Money, explains his framework for value-based pricing in AI software to host Greg Isenberg.
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“With an AI company, it feels really clear to me that you look at the number, the amount of human input that you're saving, And the cost of that human input, and I mean total cost, I mean salary, emotional damage that you have to sustain in doing the work, you know, all of that stuff. And by the way, those two things are very important because like, you know, some things in the world are really, really annoying, but only take like five or 10 minutes. But if you automate them away, I'll pay more. Then the time saved because of the emotional damage you're saving me or the frustration that you're saying, right? So you have to kind of like apply that lens or that adjustment factor. And then and then I think you just apply a discount. Like, okay, like, I just saved you a 100,000 dollars worth of labor, 50,000 dollars worth of emotional damage, a 150 grand. Okay, it's a machine doing it, so I'm gonna price that at a 75% discount, or a 50% discount, or an 80% discount.”
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