Excellent and so much needed research and analysis. Thanks for the effort 👌
Interesting that 40% of the tools do not have public pricing - one of my pet peeves as a buyer. Wondering how that impacts growth or when those companies make their pricing public.
Thorough article Kyle, at a prior company as a solution leader i was challenged with reducing the amount of SKU's ( >50k to <5k ), whilst reducing the complexity of so many different pricing models (over 60 per GB, per core, per partner, etc down to 2) at the same time as transitioning to cloud, where we were very unsure and the back office costs of running the infrastructure was so different because of not necessarily knowing how much organisations were going to use - and planning to make sure you had it covered. To see how you explained whats out there now and the associated challenges was really insightful. It would really help - on the outcome focused models you saw - to know how many of those organisations had value engineering approaches or teams? any ideas? As its a convo we have alot in my current role about outcome based focus within a TA/HCM transition. Would appreciate any thoughts on it.. thanks 🙏
Great article. I think there is an overflow on monthly subscriptions, both in B2B and B2C.
Here is an idea for a startup: connect the data of all my subscriptions, analyze my usage, and provide me with recommendations and automatic way to turn off / switch between subscription tiers.
For example - there are some months I didn’t use Netflix at all, but we still paid. Some months we can do a lot of binge watching - I don’t mind paying more for those. It’s like have a subscription with unlimited cinema tickets.. it only makes sense in rare cases, most people just buy tickets when they to to the cinema.
Same with ChatGPT - there are weeks and months I don’t need the paid version, and sometimes I heavily use it. The switch should be seamless and automatic.
A great example of a monthly subscription is audible - I get one book a month, consistently, and my usage is stable. They also have a subscription if $5 a month which can be used to listen to free books and ones you already bought.
In the B2B there are also similar examples, where we overpay only because it’s the only pricing model available.
Great insights on ricing and packaging for AI 🙌 One recurring challenge I see in my work is existing products that add AI to their existing packages without considering charging extra. It makes me wonder if money is left on the table if we introduce AI into existing packages without considering that more added value is created now. 🤔 What do you think, Kyle Poyar?
Hey Kyle, I'm looking for a guest post on "Do Generative AI Startup have a Path to Profitability?" Let me know in a LinkedIn DM if you are interested in covering this topic. I cross-promote newer Newsletter as guest posters.
Lots of productivity tools in this space (the likes of https://presentations.ai or https://canva.com) using AI are also doing consumer style pricing with the intent to convert within the first session itself - some offer different pricing tiers for the first outcome (e.g., at https://presentations.ai) and some offering nudges/coupons to push for the impulse sale.
Thank You 🙏 Kyle
Very timely and well researched 🙌
Great article. It would be very beneficial if you could add to the main table the focus market for every AI app - BTB or BTC
Thanks for the feedback, Tal! We tried to focus on B2B, but a bunch of these products are both B2B and B2C (prosumer & individual users)
Super interesting. Thanks for the detailed explainer.
Glad to hear you found it valuable!
Excellent and so much needed research and analysis. Thanks for the effort 👌
Interesting that 40% of the tools do not have public pricing - one of my pet peeves as a buyer. Wondering how that impacts growth or when those companies make their pricing public.
Great analysis!
Thorough article Kyle, at a prior company as a solution leader i was challenged with reducing the amount of SKU's ( >50k to <5k ), whilst reducing the complexity of so many different pricing models (over 60 per GB, per core, per partner, etc down to 2) at the same time as transitioning to cloud, where we were very unsure and the back office costs of running the infrastructure was so different because of not necessarily knowing how much organisations were going to use - and planning to make sure you had it covered. To see how you explained whats out there now and the associated challenges was really insightful. It would really help - on the outcome focused models you saw - to know how many of those organisations had value engineering approaches or teams? any ideas? As its a convo we have alot in my current role about outcome based focus within a TA/HCM transition. Would appreciate any thoughts on it.. thanks 🙏
Thanks for the note! On the value engineering side, I don’t have insight into that, sorry.
Great article. I think there is an overflow on monthly subscriptions, both in B2B and B2C.
Here is an idea for a startup: connect the data of all my subscriptions, analyze my usage, and provide me with recommendations and automatic way to turn off / switch between subscription tiers.
For example - there are some months I didn’t use Netflix at all, but we still paid. Some months we can do a lot of binge watching - I don’t mind paying more for those. It’s like have a subscription with unlimited cinema tickets.. it only makes sense in rare cases, most people just buy tickets when they to to the cinema.
Same with ChatGPT - there are weeks and months I don’t need the paid version, and sometimes I heavily use it. The switch should be seamless and automatic.
A great example of a monthly subscription is audible - I get one book a month, consistently, and my usage is stable. They also have a subscription if $5 a month which can be used to listen to free books and ones you already bought.
In the B2B there are also similar examples, where we overpay only because it’s the only pricing model available.
Great insights on ricing and packaging for AI 🙌 One recurring challenge I see in my work is existing products that add AI to their existing packages without considering charging extra. It makes me wonder if money is left on the table if we introduce AI into existing packages without considering that more added value is created now. 🤔 What do you think, Kyle Poyar?
Sounds like everyone needs to read Monetizing Innovation!
Hey Kyle, I'm looking for a guest post on "Do Generative AI Startup have a Path to Profitability?" Let me know in a LinkedIn DM if you are interested in covering this topic. I cross-promote newer Newsletter as guest posters.
Lots of productivity tools in this space (the likes of https://presentations.ai or https://canva.com) using AI are also doing consumer style pricing with the intent to convert within the first session itself - some offer different pricing tiers for the first outcome (e.g., at https://presentations.ai) and some offering nudges/coupons to push for the impulse sale.