Price on value, not cost

We charge 99 cents to resolve tickets, customer problems, and we have a higher resolution rate than anyone else. I always believe that pricing should come from value and not from costs. The cost is our problem.

Palantir is a data analytics company where forward deployed engineers work on-site at customer locations to build custom solutions.

The average deal that Palantir had was very large in the many, many millions of dollars, which means that you could pay for this as part of the thing that the customer got. And then it was priced according to the value that the customer got.

Ramanujam earlier described a two-by-two framework with quadrants based on market share versus wallet share, where outcome-based pricing sits in the top-right quadrant.

About 5% of companies are probably in a true outcome-based pricing model. If you want to win in AI, figure out a way to get to that quadrant.

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.

dbt Labs makes data transformation software that helps companies process and analyze data stored in cloud data warehouses like Snowflake or BigQuery.

And at dbt Labs we have this value, it's one of our core values that says we are more concerned with value creation than value capture. And we really mean this. When we talk about what is the value of dbt Labs to our customers, they often talk about how it's either 20 to 35% as valuable as what they spend on their cloud data warehouse. But what we charge our customers is a very small fraction of that 20 to 35% and that's by design.