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"User-based pricing is a thing of the past." How Databricks found out the hard way: "When we started selling Databricks, we were doing $15k, $18k deals annual deals. New rule became: no deals less than my monthly Uber bill. We were adding tons of value. But because we're usage-based,... show more
58,595 views โข 6 days ago โขvia X (Twitter)
12 Comments

my monthly uber bill as the new minimum deal size is a business philosophy i respect deeply

Pricing should track value, not seats. You and @mozlyxy are my go-to finance accounts for takes like this.

Starting off with $15k ACVโs turned into $200B company ๐

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All this talk and he never told us the value metric they price on lol. What a waste.

the agentic shift makes this even more interesting. charging per user can limit adoption exactly when the product gets more valuable as more agents and people use it.

Yes! Louder for the people in the back.

Pricing by value beats per user every time

The bit about per seat pricing making customers restrict who logs in is the same trap as charging for email sends. The moment a client is paying per contact they start pruning the list to save money, and the people they prune are the dormant ones who were actually the cheapest to win back. The billing model quietly decides the strategy.

Price = value means 0% ROI for the buyer. Why would anyone buy?

What about Consumer Surplus, you don't need to extract every but on value with your pricing. Give users something to be happy about

seat pricing misprices ai products and suppresses the behavior that creates the value. charging for the work done is the cleaner loop
