In the classic SaaS situation, we used to say if you can charge 10 to 20% of the value, that's actually great. But in AI, you can actually charge 25 to 50% because it is autonomous, you're doing it with the AI.
The art and science of pricing
December 08, 2022
Featuring: Madhavan Ramanujam (Managing Partner, 49 Palms VC (formerly Simon-Kucher))
3 quotes · 3 insights
Watch Full EpisodeAI demands new pricing rules
Price on value, not cost
Ramanujam is referencing a two-by-two matrix he uses to categorize pricing models, with autonomy and attribution as the two axes.
The quadrant that you really want to be in is the outcome-based pricing model, the top-right quadrant where you have great autonomy and great attribution. About 5% of companies are probably in a true outcome-based pricing model.
B2B buyers need education, not pressure
You need to be able to create needs rather than just discover them.