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One of the hottest topics in AI for B2B is around outcome-based pricing. Simply that outcome based pricing may be exciting to VCs who think it unlocks more TAM and budget, and it may seem exciting to founders and execs who think it will help them grow deal size. What I do know is a pricing model is not a product. What do I mean?
Less demand for an asset decreases price. If a supermajority of acquirers in purchasing potential are sidelined, the urgency to innovate is lessened. That’s why a vibrant M&A market is essential to innovation. This point is clear & straightforward.
Pricing Model Evolution : HubSpot’s multi-tiered pricing approachfrom free tools to enterprise solutionscreates natural upgrade paths as companies grow, maximizing lifetime value while maintaining strong operating margins (14% non-GAAP operating margin in Q1 2025). Their ecosystem extends their reach globally.
AI in B2B SaaS: The Incumbent Advantage On the AI revolution in B2B software, it’s the age-old ‘startups are innovating and racing to get distribution, and the bigger companies have distribution and are racing to innovate.’ ’ The twist this time is the data is very hard for startups to acquire or accumulate.
Backed by an acclaimed recent in-depth study of over 70 real-world GenAI offers conducted by Michael, we’ll explore the four avenues for packaging AI offerings, the importance of usage-based pricing, and how to craft a strategy that is agile, scalable, and aligns with customer values.
It’s not just part of the innovation budget anymore. AI Budgets Are Exploding—And Moving to Core IT Spend The Hard Data : Enterprise AI spend is growing 75% year-over-year, with innovation budget allocation dropping from 25% to just 7% of total AI spend. The Price War : Google’s Gemini 2.5 Flash costs $0.26/million
Startups are innovation machines. Others want to innovate in every dimension and re-invent every discipline from pricing to marketing to support to customer success. Brad Birnbaum, founder and CEO of Kustomer , discussed the challenges of innovating on two dimensions simultaneously on the [Saastr podcast]().
Founder-Driven AI Innovation Seema Amble, Partner at Andreessen Horowitz shared that something they’re seeing across their portfolio of founders, especially the ones launching an AI product or a standalone product is boost their founder-level engagement on the human side of AI.
SaaS pricing isn’t static – it’s a living strategy that grows with your company. In this article we dive into a playbook for pricing across different stages of company growth, inspired by Geoffrey Moore’s Crossing the Chasm. Tiered pricing models emerge to address these differences.
PricingInnovation: RevenueCat moved from flat fees ($120-$499/month) to a percentage of revenue model, making their tools accessible to smaller developers while scaling with larger ones. The mobile subscription economy is still in its early innings, and RevenueCat is positioned to power the next wave of innovation.
Under his leadership, the company has developed innovative AI-powered solutions for restaurant websites, online ordering, CRM, and marketing automation. Josh Browder, CEO DoNotPay Josh Browder is the founder and CEO of DoNotPay.com, an innovative consumer-focused AI platform.
This isn’t just about productivity — it’s about economic disruption : The Agent Economics: Traditional SaaS: $3,500 per employee annually across organizations AI Agents: Can replace entire job functions for <$100/month The math may be devastating for high priced seat-based pricing models 3.
Dear SaaStr: Why are pricing tiers so effective? I’m no pricing psychologist, but a few thoughts: Buyers like a >few< choices. Tiers have been established for decades and are a well-understood process for presenting options where pricing can be at least semi-transparent. My advice: innovate on product.
Procore has developed several innovative approaches to achieve this: Construction Boot Camp: Every new employee, regardless of role, goes through a two-week immersion in construction. This isn’t just about product training it’s about understanding the industry’s challenges, culture, and vocabulary.
The company has also been building strategic moats through innovative products like Navan Connect, which allows enterprises to keep existing banking relationships while accessing Navan’s expense management capabilities. These aren’t coincidental hires. But these were largely specialized or consumer-adjacent plays. volume $91.5B
Unlimited budgets for “AI” and “cybersecurity” Long contract terms (3-7 years) High switching costs (security clearances) Less price sensitivity Actionable Takeaways For Current B2B Founders: Audit your “mission-critical” score – Would customers pay 2x your price? If no, you’re in danger.
Since that era, hedge funds have innovated roughly every decade or so. With that backdrop, the first quant funds formed to forecast price swings in commodities and capitalize on correct calculations. And without a doubt, these firms will continue to innovate and push the market forward.
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Nw’s the very best time to buy tickets before prices go up Jan 31. And our full AI Summit will be back and we’re adding a full AI Demo Stage you can apply to present at (more details soon!) It’s going to be one of our most epic line-ups ever!
A few thoughts at least: The stronger the brand, the more complex the pricing page can be. That means their prospects will be more patient with complex pricing. But your prospects may just move on if the pricing page makes it seem too … hard. Innovation is great … just often not on pricing. Prospects need context.
Should you price your SaaS per seat or per use? The first thing to state is that massive companies have been built using both pricing structures: Salesforce and Adobe bill per seat while Snowflake and Twilio charge per use. When to use per seat pricing. Would they switch if the pricing weren’t predictable?
Their innovative approach involves a wearable device that captures and contextualizes user interactions, creating a personalized AI assistant that promises to enhance individual productivity in unprecedented ways. Dan Siroker of Limitless AI is pioneering a personal AI platform centered on augmenting human capabilities.
If youre not innovating fast enough or delivering a truly differentiated product, youll get drowned out by the sheer volume of new entrants. Pricing Pressure : AI is driving down the cost of certain types of software, especially those that rely heavily on manual processes or human intervention. Have you stepped up?
Pricing is one of the questions that persist through the evolution of a company. A common topic today in software startup board rooms is: should the company price by seat or by usage? Madhavan has led more than 200 pricing projects across software companies. It’s the canonical book on modern pricing.
The shift from “innovation budget” to “operational budget” means AI tools must compete directly with established software investments—and many aren’t winning those comparisons yet. Price pressure is coming. ROI scrutiny is intensifying. Feature wars are just beginning.
Lemkin (@jasonlk) May 27, 2025 10 Unexpected Learnings from SVB’s 2025 State of the Markets Report Beyond the AI boom headlines, the 1H’25 data reveals surprising shifts that could reshape how we think about venture capital, startup operations, and the innovation economy. Why It Matters : With $1.4T
Generative AI is revolutionizing how corporations operate by enhancing efficiency and innovation across various functions. Key Functions with High Impact Generative AI is revolutionizing sales by enabling dynamic pricing and personalized customer interactions, boosting conversion rates and customer satisfaction.
The more established your brand, the more complex your pricing page can be. What makes for a good pricing page? A few thoughts at least — mainly about what to copy from the big leaders, and what to maybe not copy from them: The stronger the brand, the more complex the pricing page can be. You aren’t there yet.
By BluLogix Team AI Billing Innovations, Usage-Based Pricing, Credits, and Prepaid Models AI Billing Needs a New Approach Unlike traditional SaaS, AI products often require real-time metering and consumption-based pricing. As AI adoption scales, we can expect even more innovative approaches to monetization.
Look for an innovative enterprise customer who: Is willing to be a development partner Has clear needs you can solve today Will give you access to testing environments Can help shape your roadmap The goal isn’t to build custom features – it’s to deeply understand enterprise requirements and bake them into your core product.
The key isn’t trying to out-innovate AI-native companies at their own game, but rather becoming indispensable infrastructure for the AI revolution. 📈 Performance Summary Tables Top 10 SaaS Winners (1H’25) Bottom 10 SaaS Losers (1H’25) – Negative YTD Performance 🚀 Top 10 SaaS Gainers (1H’25) 1.
Walker Research found in 2024 that the customer experience is now equal to price and product regarding key brand differentiators. Customers you have a bond with will give you positive reviews on G2, become your reference customers, share their success stories, and work together with you on product innovation.
150+ Sponsors Driving Innovation From the biggest names in cloud to the most exciting startups, our 150+ sponsors are showcasing the latest innovations in SaaS and AI. VIP Summits for Every Role Weve expanded our VIP events to include summits for CROs, CMOs, CFOs, and CCOs. And networking.
IPOs priced so far—up 62.5% Nine of the ten largest IPOs in 2024 ended the year trading above their pre-listing prices, with half achieving triple-digit gains. Quality companies are winning big : Over 85% of 2024 IPOs priced within or above their initial marketing price ranges. over the same period last year.
Success requires: AI-driven innovation Laser-focused value propositions Rapid time-to-value strategies By understanding and adapting to these emerging AI trends, go-to-market teams can transform these trends into opportunities for growth and customer retention.
When it came to deciding which features to monetize, we decided to go with a buyer-based open core model, which prices out features based on the size and needs of each buyer. Users in paid tiers made over 50% of overall wider community contributions in 2021 because they feel invested in improving the product for themselves.
The company’s pricing structure, centered around $10,000 average contract values (ACVs), created a problematic middle ground – too expensive for small and medium-sized businesses but not substantial enough to support a partner channel strategy effectively.
This provides an efficient way to evaluate potential additions to your tech stack, negotiate deals, and discover innovative solutions to operational challenges. Many vendors offer special event pricing or extended trials, creating additional value.
Changing customer expectations, digital advancement, and transforming market trends call for a price discipline. Fair and competitive pricing, especially in the SaaS arena has emerged as a strong requirement for businesses looking for operational stability. What is Dynamic Pricing SaaS? 7 Types of Dynamic SaaS Pricing 1.
In 2014, Atiyah co-founded Parabus, a consumer-focused startup that automatically secured refunds when prices dropped on online purchases. At its peak, Parabus saved millions of dollars for its 10 million customers before being acquired by Capital One after just three years.
While competitors innovated, our vendor’s product remained frozen in time. Then they raised prices. It was fine. Then… nothing. The UI looked increasingly dated. Performance issues multiplied. Support tickets disappeared into the void. Even worse, social media changed and the product barely worked now.
As long as they continue to innovate, they should win as well. Per Brian, on the AI revolution in B2B software, its the age-old startups are innovating and racing to get distribution, and the bigger companies have distribution and are racing to innovate. The nuts and bolts of B2B.
By Inga Broerman How Usage-Based Pricing is Transforming Subscription Billing The subscription economy is undergoing a transformation, driven by the rising popularity of usage-based pricing. Schedule a Demo Today The Shift to Usage-Based Pricing Its an inevitable now. The chickens are coming home to roost for good in 2025.
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