"These startups package this pricing in a dozen different ways... uniquely different pricing models just adds artificial complexity to a simple phenomenon.
Artificial complexity is my least favorite kind of complexity."
Fantastic analysis! Loved the approach of inelastic and elastic demand. SaaS or seats based pricing has a basic assumption behind it that an additional seat has a marginal cost of near zero - while this is not true for GenAI where marginal cost increases with usage. How does that factor into your thinking? Is that why you argue for a fixed seat price plus a consumption element for heavy users? I love how this topic is so front and center right now - pricing and packaging is exciting stuff. How would you say should companies think about iterating and testing their pricing and packaging models?
Love it!!
"These startups package this pricing in a dozen different ways... uniquely different pricing models just adds artificial complexity to a simple phenomenon.
Artificial complexity is my least favorite kind of complexity."
Fantastic analysis! Loved the approach of inelastic and elastic demand. SaaS or seats based pricing has a basic assumption behind it that an additional seat has a marginal cost of near zero - while this is not true for GenAI where marginal cost increases with usage. How does that factor into your thinking? Is that why you argue for a fixed seat price plus a consumption element for heavy users? I love how this topic is so front and center right now - pricing and packaging is exciting stuff. How would you say should companies think about iterating and testing their pricing and packaging models?
Coming in hot with those burns! Love the intern baker metaphor 😂fantastic analysis Sandhya!