Episode Transcript
[00:00:00] Speaker A: Don't forget about your sales partners. You know, that's where all the money is going to come in. And if you forget about that relationship and kind of what the pricing model has, how it has to work for them, you're going to run into trouble.
[00:00:10] Speaker B: Yo, Mike check. What's up everybody? You're listening to the Street Pricing Podcast, the only show where proven SaaS leaders share their mindset and mistakes in pricing so we can all stop guessing and start growing. Enjoy, subscribe and tell a friend. Now let's break it down with your host and sought after slayer of bad pricing, Marcos Rivera. What's up and welcome to the Street Pricing Podcast. I'm Marcos Rivera, author, founder and CEO of Pricing IO and today's guest is a fellow, I would say a fellow pricing buff. Like, we love to talk about pricing inside and out. I have David Kaufman with me. He runs pricing at Docker. David, welcome to the show, man.
[00:00:51] Speaker A: Marcos, thanks for having me. Love talking pricing. So you nailed it, pricing buff.
[00:00:56] Speaker B: I mean, we're going to have a lot of fun chatting about this today because I don't get to talk to too many buffs. People who read it, get into it and solve pricing problems like I do. So we're going to jump in. But before we do, why don't you tell the audience a little bit about you and what you do.
[00:01:08] Speaker A: I mean, as you mentioned, I'm a pricing buff. I've been in the pricing world my entire post MBA career. So that's, I'm coming up on 11, 12 years of being in pricing in various forms or fashions. So initially I was, I was running dynamic pricing models for airlines and hotels and things like that. And then I did that for a couple of years and then left to and joined a company called Simon Kutcher Partners. They also do pricing. They're the, you know, the world's largest pricing consultancy. But yeah, that's where I spent most of my foundational years. I'd say I was at Simon KUTCHER for, for four years I focused on B2B SaaS pricing, monetization. So I learned the whole Simon Kutcher playbook around pricing and packaging for B2B SaaS companies. You know, I never really had it in my sights to be a partner at a consulting company. Just didn't like the lifestyle. And I got a great offer to jump ship from Simon Kutcher travel across the country. I was in New York. I got an offer from Stripe to go be the second hire on their monetization team back in 2019. So not quite like early, early days Stripe, but like early mid middays and yeah, so that was, that was a blast. I got a lot of great experience there, worked with a lot of smart people, did a lot of really cool things. At the end of everything, like two years was plenty. I felt like I accomplished a lot and this was now kind of in the pandemic and I decided to start my own consulting business. I figured that, you know, with Simon Kuchner Partners you're going to spend six, seven figure consulting budgets to get really world class pricing advice. But there's a market for much cheaper but still high quality pricing advice for companies that maybe aren't quite as well funded or much smaller in their growth stages. And so that was the value proposition behind AXA Consulting. And so that's the company I started in 20 and 21 and I'm still, I still dabble with that even though I am leading pricing, leading pricing at Docker. But I did that full time. I did that exclusively for two years. All referral business, no out, no marketing of any kind. I've got a great network of people from Simon Kutcher and also Stripe and other places that were referring me business. And then Docker came knocking and it was another great opportunity. Docker is a great brand name. It's known very well in the software development community and it's offered some really unique challenges for someone like me. And pricing is an open source native company. And so it comes, you know, with that comes a whole host of really interesting and unique challenges for someone who's in my world. And really monetization was like maybe one of the biggest things holding them back from really, you know, commercial success. And so that just seemed like a great opportunity. I jumped at it. I've been there for a little over two years now and yeah, now, now.
[00:03:48] Speaker B: Here I am and here you are, man with the pedigree, I mean Simon Kutcher, Stripe, Docker, a lot of great places to learn and plus just also in other pricing context you've been dabbling in. So this is going to be a big treat because you've done as much pricing and digging in and seen a lot of different things as I have. And so we're going to be able to talk a lot of good stuff today, man. Are you ready to get Street?
[00:04:09] Speaker A: I'm ready.
[00:04:09] Speaker B: Cool man, cool. So let me give a quick roadmap for the audience here. So this show is based on the book Street Pricing. So what we're going to do is lay it out in the Same way. We're first going to start with Rewind, which is a story about a struggle, success in pricing and you have plenty of them. So I can't wait to see which one you pick and talk about today. And then we're going to move on to play, which is what's working today. Maybe we could talk about what are some of the cool things you've done at Docker, things that you seem to resonate and help with monetization. And then we're going to move into fast forward. So where is pricing going? And this is really going to be fun because for somebody who's seen so many different models out there, there's probably some trends you're picking up on. Maybe we can get into all this fun AI stuff that's going on too, right? So we'll talk about the future and that's going to be the show, man. So with all that, if that sounds good, why don't you open things up, David, with a story?
[00:05:00] Speaker A: So this is like kind of a, a lesson learned kind of story here, right? Is that okay? That's the idea. You know, so many to choose from, to be honest. I mean, there's one recently that stands out. I mean, so Docker, if people are familiar, I mean Docker has one great application that's the gold standard used millions of software developers every day companies. And so, you know, one of Docker's, you know, besides monetization, like one of the things that they have to really do to grow revenue is going to be to attach, you know, new products and new ARR to this like really game changing application that everybody uses. And so our first effort at coming up with what we called our first second product kind of was kind of a failure. And you know, I think there were some things, you know, there was a lot of lessons to be shared from everybody that was involved, but I think there's definitely some pricing lessons that were involved too. One thing. So I'll set some more context. It was a security sort of software security scanning tool. And we wanted to have both a product, a PLG and an SLG motion for this, for this new product. We wanted it to be able to be adopted, bottoms up by software developers and their teams, but also top down by larger VP of engineering and procurement and so on and so forth. And myself being embedded in the product Org and with a lot of, I don't want to say pricing theory, but like at Simon Kutcher, like you do a lot of pricing strategy and a lot of the things you learn are Very tied to product strategy and how the product works, what the use cases are, what are the inputs of the product, what are the outputs. And so you're very into the nitty gritty of the product design, how it works, who's using it. And also just sitting inside the product world like I was at the time, that was kind of the way that I was looking at the product. Of course we also had a, you know, a sales led, sales led motion. And so I think one thing that, that I could have done a better job was, is really understanding Docker sells very complex products. Even for me, I honestly don't really understand exactly what the products do a lot of the times. And so not sort of not having that really strong partnership with go to market teams and sales. You know, I think if I have been able to really involve them in the same way that I involve product managers, product marketing managers, product designers really would have gone a long way in helping ensure that we could sell this thing that it was easy for sales to sell. You know, I mean as a second product sales primary focus was selling our, you know, our main killer product. And so it wasn't always as high of a priority for them to sell a smaller like newer product. And so really making sure that the pricing model was super simple and could be easily pitched by sales was something that I think we kind of missed on. We kind of scrapped it recently and we kind of just included it now within the broader suite of products. It's no longer a standalone product product that we try to sell. So I think that's a good lesson learned out there for, for people especially if you're sitting in product like don't, don't forget about your sales partners. You know, that's where all the money is going to come in. And if you, if you forget about that relationship and, and, and kind of what the price model has, how it has to work for them, you're going to run into trouble.
[00:08:21] Speaker B: Oh yeah, yeah, big trouble. Because this, I look at them as almost the number one stakeholder of the pricing model, right. Especially in the sales lead motion. They need to be able to use it, frame it, position it, close on it and things like that. So this is interesting to me because I also came from the world of product, right. And so it sounds like in this scenario with this security scanning tool that you were able to just to build it out, right. And maybe there were some use cases you thought that folks were really having a big pain that they wanted to solve and pay for. In addition to that and the way they pay is actually really important, especially in, in this context, right? When you got complicated products and buyers who don't want to spend a lot of money, they could probably solve. Solve for their problems in a different way, right? So let me ask you this, right? So as you were working with the team, there's something that I used to read back in my product days. Marty Kagans has a couple of good books and Marty talks about these four risks, right? And one of those four risks is value. Risk is the value going to resonate with that group, right? And so the big question is not all value is worth paying for, which is a weird thing to think about, right? You think, oh, value is. Is something that everyone should be willing to pay for. But it's all, it's all set within the context, right? Is it really that much more solving the problem that is worth dish out more money. And if you're trying to raise attach rates and trying to raise attach rates, ARR oftentimes you're trying to extend from use cases you're already solving pretty damn well, but enough to get them to spend more and change more. This is the piece that people forget, right? Is that people would. Humans will create muscle memory around any product, okay? And so for them to change and expand beyond that muscle memory, it's got to be worth it for them. And then to pull out and shell out some more money, it's got to be worth it, right? So let me ask a question. If you were to go back in time and see like, all right, if we were to look at this thing differently and get sales a little bit more aligned and how to sell, maybe what are one or two steps you would have done with sales to get.
[00:10:14] Speaker A: Them in, getting them leadership more involved at every step throughout the process. You know, I think the approach within the product. Org was hey, let's, you know, they don't necessarily need to know how the sausages made sales. They just. They needed. They want to know what to do, how to do it and then. And then to go do it. With complex products and complex pricing models, it's worth considering really trying to bring people along in the process as you develop the pricing model, as you talk to customers and you learn how they're using the product, because these are also things that are important to sales when they sell. A lot of the same questions that I'm trying to answer around use cases and customer Persona and segmentation that inform pricing are very much things that sales is going to want to know and it's going to help them sell the new product as well. And so I think really just getting them involved in some of the more of the sausage making and you know, at an earlier stage would have really helped.
[00:11:09] Speaker B: Yeah. I think early in the understanding of where. How it's coming along and maybe even giving them the sensation of input and getting their feedback along the way, oftentimes I found that that opens things up. Right?
[00:11:21] Speaker A: Yeah, they, they want to be listened to. Everybody wants to be listened to. It's not. Yeah. And, and really, you know, having that feedback line open and being able to take that feedback early on is key.
[00:11:31] Speaker B: Yeah, no, absolutely. They definitely wanted to get there to weigh in. Most of the times when sales sees a price change coming, they get a little guarded. Right. I mean, I don't know if you've seen this in all the other ones that projects have you been on, but they start to get guarded like, hey, are you trying to make it harder for me to hit quota? Because that's the number one way to lose sales on your side or to lose their buy in is to make it feel like you're losing quota. So one thing I always look at is how is this going to change their commission structure or how's it going to make them help them close the deals with maybe fewer calls, fewer steps, maybe help them, you know, angle and maneuver. You always got to give sales a way to go. And this is one of the biggest things I learned in my career. They got to be able to close and if they feel like the new model gives them more ways to close and the old model oftentimes they'll jump on board.
[00:12:19] Speaker A: Absolutely. Absolutely. You nailed it. Yeah.
[00:12:22] Speaker B: Let me ask you this. In a scenario where you did it right, where you felt like, man, I should have done it that way or I really did a good job and connecting go to market and sales, what does that look like? What did you do differently in that scenario where sales was fully bought in?
[00:12:36] Speaker A: You can never over communicate with sales. I mean, sales are so busy like, and things are constantly changing with the product and how it's marketed and like, and they have to be on top of all of that stuff to do their job well. And so in any given week, there's dozens of internal FAQs or memos or whatever that's getting thrown, you know, throwing at that org and you know, like, they do the best to keep stay on top of things. But I mean, to be realistic, like maybe, maybe 10% of that stuff is going to hit or 10% of it's really going to resonate at that point in time. But if you keep just hammering it over and over and over and communicating things over and over and over and really don't be afraid to over that's been crucial. I mean we've, we've set up Slack channels weeks to docker just change our entire pricing and product strategy last week. So very proud about that. And you know, having all kinds of Slack channels set up to where sales can come in and ask any sort of question and someone's going to give them an answer within, you know, within a few hours. Just things like that really make or break. Can make or break the change.
[00:13:42] Speaker B: Yeah, that's huge. By the way, a dedicated Slack channel to answer questions. I knew a company who did that. They created a channel and then they went a step further and even created like it was like a weekly office hours or something like that where they just rolled out the pricing and they wanted to make sure that sales like we got, we got your back like we got all your support and questions and answers. So that they did is they, they created a slack just for questions on, on pricing and to capture anything they're seeing on how the customer is reacting to this new model and things like that. And then from there they create, they created an office hours where it's like all right, come on in, let's talk about sometimes it was honestly just like a deal specific question but it was just also like hey, I'm kind of confused about this package or is this thing included? Just really giving them a hand goes a long way.
[00:14:25] Speaker A: I like that two way communication too because you know sales, they get the voice of the customer and so there's feedback that we would love to get from them. And so like having that, you know, that office hours or whatever set up so they can come back and tell us like what they're hearing about, about the change. I mean that's huge. That's really, that's really. That's great.
[00:14:43] Speaker B: Yeah, you can't lose sight of that. They need to stay on your side. Not just as you're building, as you were saying, which was really good point. But when you launch and when it's getting out there and then all these stories are going to start coming in, right? The horror stories or stories of victory. Who's to say? Right. But they're all going to come in and you have to sort of find ways to fight through that noise to see what's really going on. Right. And so those two things I think are super helpful. I think that's a Big, valuable lesson for everybody listening here who may think that, hey, sales just needs to grab whatever pricing model you give them and let them run. I think pulling them in like you said earlier, and then creating those channels and those, those central points of, of exchanges and two way communication, it's gotta be the key, man. It's gotta be there. Team, I want to take a quick pause here to ask you for a huge favor that'll mean a lot to me. Please review and share the show. Share it with your team, your friends, your peers. Not only will it help them stop the guesswork in pricing, but it'll also help you and increase the chances that you'll take action and change for yourself. All right, much love. Now back to the show. Let's move us from, from the rewind because I think that's a big lesson. Let's move to the play. What's going on today? Because you said you've been at Docker now for a little over, what, two years?
[00:15:51] Speaker A: Yeah, almost two and a half.
[00:15:53] Speaker B: And I'm guessing you made some changes, right, since you've been there. And I want you to think through all that, what's been a change that either you're most proud of or that's really resonated and helped out Docker?
[00:16:03] Speaker A: I think the biggest change is what we just released just in the last few weeks, and that's our completely changed how Docker is pricing and packaging these new features and products that we offer. And so I alluded to this a little bit before, but, you know, initially we were thinking we were trying to sell these new features, products as discrete Net new things with its own, their own pricing model and things like that. And so like, if you, if you buy the core Docker products, you're going to buy a seat, right? And that seat gets you access to the core Docker product. And so our second new products that we tried to launch was also a seat based product. And so we sold it as another, okay, if you want access to this product, you already have a Docker seat, while you've got to pay a seat for the new product as well. And so we were slowly starting to end up with a world where a customer of Docker was going to have multiple different seats and seat prices to get access to all the products that we were having. And so we quickly realized that what if we just collapse all of these, all these new C prices that we're trying to add on to the core C price and just included everything as a single C price that gets you access to A limited access to all of the new products and then there's a consumption layer that we add on top of that. So now when you buy a Docker seat, you get access to all the new cool stuff that we're, that we're building for developers. You don't have to buy the new seed price. And so you can immediately start experimenting with some of these new products in a limited way, of course. And if you, you know, if you hit these, these consumption limit thresholds and it's really providing value for you, that's when you can go and buy minutes or, or scans or whatever the unit of measure might be. But transitioning more from, you know, a company with several discrete products to truly a platform pricing and packaging I think is going to be a really cool, really cool change and really going to help, really going to help developers discover all this new stuff that the Dockers do. I mean, Docker's known for doing one thing, one thing really well. And, and now that we have this new pricing model, I think it's going to be easy for developers to find all these new things without that barrier that a new seat price was creating.
[00:18:13] Speaker B: Yeah, that collapsing in consumption, that type of idea makes a lot of sense in my mind. How did you guys think through like as you were talking to the base? Because I'm sure the thing about selling to like technical folks is that they, they have their opinions, right, and they sort of like buying in certain ways and they can react really strongly to changes in the model. So what did you hear from, from the customer and the audience out there about this, this collapsing down like the different seats and then adding this consumption layer?
[00:18:39] Speaker A: I think they loved it. They already, there was already a consumption layer. So that when at first the new seat price also came with limited consumption and consumption on top of it. So we were already limiting consumption and selling consumption with the, when we were charging for the new seats individually. So I mean customers, when we asked them, hey, what do you think about no longer paying this seat fee? Right. Is this extra seat fee, you know, we might raise your current core Docker seat price by a couple of dollars, but it's, you know, it's still a lot better than paying a full price seat for this new product. I think it was a no brainer for customers. We were really lucky that we were still early on in the process, like none of these new products had really achieved escape velocity in terms of ARR. So it wasn't too painful for us from like an ARR perspective to, you know, to make that hit it was still early enough that we could kind of absorb this loss and you know, additional seat. Seat ARR. And can kind of get away with it. So we were lucky in that regard. It's a lot easier for billing systems to implement this type of system than it is a system where there's multiple different seat prices, each with its own consumption limit and consumption metric. You know, if you have just a single seat price and then consumption layers on top of it, that is a whole lot easier for. For systems and billing to handle than what we were. What we started off doing. So that was a win for them as well.
[00:20:01] Speaker B: Yeah, that's super important too, because if you think about like the quote was probably so much simpler too, right. At the end of the day, that one single seat, even though the price was higher. That's the key. I heard you say that a minute ago. Right. So the price was higher. But you don't have to pay for all these different seats anymore. You can just pay with one in that balance here. I'm sure there was some math behind the scenes to make sure that all worked out for you guys. Right. But I'm actually thinking that's a very interesting way that you laid it out because your customers are telling you, I'm actually willing to pay you a little bit more for this one seat to get the simplicity and access, not think about like five different seats. Right. It also probably makes it easier to buy more, which I think is another big key in your success story. Right. So did you see anything happen? Like did upsell expansion start to go up or did you see seats go down? Like, what did you see when you guys made that change?
[00:20:48] Speaker A: It's still really early days. So we just launched this. You know, this is kind of hot off the press, but so no big insights yet. But I expect that, you know, there's a lot, much fewer line items for a procurement team, for example, to go in and try to pick apart.
[00:21:04] Speaker B: I love it. Yeah. I think the way you describe it, it does seem like a no brainer for both sides for the customer side and for the docker side. So huge win under. Under your cap. But I'm sure it was a team effort. Was there anybody on the team that actually said, actually, you know what, this shouldn't, we should not do this, we should not collapse it. We should not go down this path because of any reasons. Did anybody push back?
[00:21:23] Speaker A: You know, there was some pushback and the challenge was there was, you know, product leads who were in charge of their own P Ls and their ARR for their own individual product areas. And so when you go to tell them, hey, you know what, like, you're not gonna, we're not gonna. Customers aren't gonna buy a new C price for your product anymore. It's gonna be part of the old C price. You know, that's a lot of internal expectations and level setting and maybe like readjustment of targets and bonuses and things like that like need to happen to get away with something like that. But yeah, I mean, there was definitely some resistance internally. Mostly people just kind of, you know, trying to defend their, their, their targets and things like that. That was the main, the main area of pushback, I would say.
[00:22:08] Speaker B: Yeah, I think that's a really important call out though, because as companies grow, right, you start with the product and then you have like multiple products and you go from multi product to platform. It's very natural sort of evolutionary arc, right? Then you start getting people in charge of these things and then they begin, you know, to try to, you know, so they moving fast and developing and expanding their own little mini kingdoms, if you will. This type of model sounds like people had to adjust to like, hey, it's not about my product anymore, it's about Docker, like all of us, the platform, and that is a shift in of itself and even your operating model in house. Right? You just said bonuses and structures and targets. So I think people tend to overlook that. Right. They think about, oh, you know, we'll change the pricing model this way makes sense, but there could be some implications that you might have to change the way you run the business if you want to achieve this model.
[00:22:58] Speaker A: It never surprises me how sensitive. I mean, of course people say pricing is so sensitive to touch, but I mean it, there's truly nothing that's more sensitive that I can think of in a product, in a company than, than price. The, the ripple effects of making changes to pricing are just so, so widespread and so impactful, not just to custom internally. It's really, truly is a huge undertaking to try to try to change things. It's a, it's a tough job.
[00:23:24] Speaker B: It is, it is. And it's, it's more than just slapping a number on a pricing page on your website, right? There's a lot of things behind it. And just listening to you, I mean, this evolutionary shift again, because companies grow, they grow in complexity. I'm sure Docker was once a small little company, is now they're huge. But the point being is that sometimes, and one big warning that I've seen in a lot of companies is sometimes your pricing model may be externalizing your complexity. What I mean is like externalizing your Org structure, external, externalizing your limitations and billing and your software. And so a lot of times that could spill into the pricing model and create something that's just really hard to sell, really hard to buy. And I think as a, as a company, you have to be able to watch how they're both interacting, how you operate and how you price.
[00:24:11] Speaker A: Definitely. Definitely. I think our old model was definitely kind of reflecting our work structure. So. Yeah, that's a great point.
[00:24:18] Speaker B: I've seen it before. I know you've seen it a few times as well. If you had to give away just one big lesson in that, in, in your journey, even though your journey at Doc is still there, what would you give as the one big lesson you've learned in the two and a half years so far?
[00:24:31] Speaker A: Start early. I mean, if you're thinking about doing a pricing change, start planning now. Like we were saying, there's.
[00:24:37] Speaker B: So.
[00:24:37] Speaker A: There's so much complexity involved. It touches so many parts of an organization. It's not as easy as just slapping a number on, on a product. It's. So if you think you might want to change pricing next year, you should be starting. Start right now.
[00:24:52] Speaker B: There you go. I think that's a good one, right? If you think, I think honestly, you're.
[00:24:55] Speaker A: Probably late if you haven't started.
[00:24:57] Speaker B: You took the words right out of my mouth. I was just going to say that if you're thinking about it, you're probably already too late. Right? So that's a, that's a good one for a lot of people to remember because there is a, I think a tendency to push it off, right? Like, hey, you know, we're winning some deals, right? We're moving, we got stuff going on. Let's just deal with it later. But I think there's also a big time element too that you lose out on, right? So people may be leaving money on the table, but we didn't realize is that these tables also disappear because of the compounding of recurring revenue. And how that works is that change in pricing six months from now versus today, you're losing out on that time. Right. And that compounding, even though you're able to, to make up later, I think there's a big lesson there. So thank you, man, for that one. So let's get onto the last section here, which is Fast Forward. You know, you're already pushing Docker forward in their pricing strategy and their thinking and their model, it sounds like things are working. But if you look ahead another couple years maybe. Right. And you see all this change with adoption and embracing more complex models like usage or just how AI is now pushing things even further into work delivered activities and outcome based. Like where do you see all this going? For Docker or just for anybody in general? Like you're probably seeing a lot of different models coming your way.
[00:26:09] Speaker A: Yeah. AI. I mean it's so. It sounds cliche to say it, but AI is certainly changing, changing the game. And it honestly, it starts with B2B software in general. You know, before we even think about pricing like B2B completely up into AI, especially agent AI. And so, you know, the software, the B2B software of the last 10 years is. It's going to be so different in the next 10 years and it's really exciting, exciting time to kind of be thinking about that because it does start to open up some really cool and interesting pricing models to kind of tie it back to pricing. I think you alluded to it for a second, but outcome based pricing. So if you've got AI agents working for you and working on tasks and trying to actually do things for you with AI, agentic AI, it definitely seems a lot closer. Closer than ever. So that's super exciting. Yeah, it's a really interesting time. It's a fun time. Pricing is, is going to evolve along with, with AI and it's just, it's a great profession. It's a great profession to be in. It's super important to a company and I'm just really excited about what the future holds.
[00:27:14] Speaker B: Yeah. On our side as well. I mean solving the problem is, is a huge undertaking in data pattern recognition. Aligning all these different vectors on strategy, your product, the customer, where you're going, all those key things. And I can help and assist in a lot of that. Right. I mean this still has a way to go. I think they made leaps and bounds over the last couple of years in this agent based pricing thing that you talked about where you have now outcomes and like the old resolution that we're seeing from Zendesk and some of these other ones. Right. I think it makes a lot of sense if you can align the outcome and it's easy to attribute that outcome to the AI. Say hey, for, for each resolution of a case, for each, I don't know, reservation booked for a restaurant, like you can, you can make it very, very clear that if the AI did the job, you should get paid for that job. Right. Just like people but then you get into the ones where software is kind of assisting or helping something out. You know, I'm thinking of accounting software was sending an invoice. Maybe AI does part of it, but the human does the other part. So then where does the attribution come in? Who gets the credit?
[00:28:14] Speaker A: Right.
[00:28:14] Speaker B: That's been one of the biggest topics going on out there is, is how do you divvy it up. So that way when you price, it still comes down to feeling fair, don't you think, David?
[00:28:23] Speaker A: Absolutely. You know, the old adage that the price metric has, has to be tied to the value the product is delivering and outcome based software, it's, it's easier to kind of define that and attribute that to AI, but when it's a little murkier, it's, you know, it's a little bit different. One thing that I think about is showing ChatGPT and the pricing model, it's not outcome based pricing, it's input based pricing. So based on the input to the GPT algorithm and you know, maybe, maybe that's another way to think about some of this, this example that your AI is assisting and you know, is providing some of the inputs and not necessarily, you know, the output itself. And so maybe trying to, you know, find some way to give some credit to the inputs, you know, could be, could be interesting.
[00:29:08] Speaker B: Yeah, that's, you know, it's interesting. You bring up the inputs because there's, there is a spectrum, right? You got inputs and then stuff happens and then outputs, right? And that's how most software tends to work. Think about like designer tool for a UX person, like maybe like a figma or sketch or something like that, right? Where I'm in there and I'm designing something. Now I'm doing the work because I'm designing, but the software is helping me with their templates and they're this and they're that maybe there's some AI in there that can give me some, maybe some design treatment and change things around or help me pick the right template or get to a better flow or interaction. Then it's helping me do my stuff faster and maybe it's allowing me to grab these inputs which I value because it allows me to do it faster or better or whatever I'm doing, right? So, so there could be something there with those. I've seen it in image recognition or image software. Maybe there's some enhancements to a recommended template or recommended flow and that could be something that could help and work done or work delivered. I think has Been like the, the not so popular, talked about cousin of outcome based pricing. Right. Because the work delivered gets, helps get to the outcome, but it's not the outcome itself.
[00:30:16] Speaker A: Right? Right. Yeah. The work done. That's, that's interesting. That's a good way to look at it like that.
[00:30:20] Speaker B: I've been going back and forth with a ton of people, there's like dozens of experts I've been talking to to see like how are we getting our arms around this new paradigm right in pricing and packaging and maybe it's just again pushing the limits of where we could go because you know, when cloud came out and you have users and then you know, you get all this advancements and usage base which is I think, you know, pretty still in its early evolutionary and now you have AI which can do stuff like real stuff end to end for you, then now.
[00:30:48] Speaker A: It'S like user based pricing. I mean it does it, is it, is it dead? I, I don't know.
[00:30:53] Speaker B: I don't know man. I think people, it's going to take a long time for it to leave. It may just like slowly like dissipate, kind of like a melting ice cube. But I think it's going to be around for a while.
[00:31:01] Speaker A: I think people so quick to declare that uses user based pricing instead. But it's, it's, it's gonna, it's not gonna, it's gonna, it's gonna stick around.
[00:31:09] Speaker B: I don't know man. I think, I think you're right. I think it's a little bit of bs dad.
[00:31:12] Speaker A: Their user based pricing is dead.
[00:31:15] Speaker B: It's provocative, let's face it, right? But it's people, right? And so at sometimes when it comes to software pricing and technology, you're kind of paying for two things, right? You're paying for activity and you're paying for access to something. And so sometimes it's just easier to do the license and move on. May not be optimal, but there could be some other things you're optimizing for. So I don't think user base price is going anywhere. I just think people are going to get smarter about like should we actually do this or should we switch to something else? Right? You got it man. There's, there's tons of knowledge in there. And I want to thank you for coming on today. I want to thank you for just being very raw and honest about your journey. What's, what's worked, what's not worked and giving your point of view, man. I think our, our SaaS community today got a ton out of it you want to leave them with just one more big thing. If you were just sitting, you know, on a stage, on a panel and they said, hey, leave us with one final thought. David, what would you say is one final thought for pricing and packaging?
[00:32:07] Speaker A: You know, get started early and involve everyone. Pricing touches everybody. It's important to everybody, impacts everybody in an organization. So really think about your stakeholders and who you have, you know, that's helping you out with. With the project.
[00:32:21] Speaker B: I love it. Start with the stakeholders. I think that's a big one. Right, because people tend to throw on their red cape and run at it by themselves. You know what I'm saying? But it gets. It's. It can be met with a lot of resistance. I think you got to bring everybody together. Yeah, I'm with you, man.
[00:32:35] Speaker A: That's so true.
[00:32:36] Speaker B: Excellent, man. Well, I'd love having you on. I got one final question. My favorite question for you, David. Are you ready? I'm going to toss it over. I gotta ask you this, Mag. I always say, everybody, what was your favorite jam or favorite song growing up?
[00:32:48] Speaker A: I thought about this. We kind of mentioned this before, before the call. And I have to go with just the first song that popped into my mind. I have to be true to myself, no matter how embarrassing it might sound. But I grew up in South Carolina, and when I was growing up, there was a band that was getting started in Columbia called Hooting the Blowfish. And we, you know, they and that. And they were, you know, they were coming. They were getting big right as I was coming of age and buying CDs. And of course they're big. Their big album, Correct Rear View came out. I forget the year, but I was in sixth grade and for my birthday, all I want to do is go to the concert. And so let me Let Her Cry has been like, one of my, like, favorite songs for. For the longest time. And in like, loving Hootie the much the way that I did used to be so unpopular, I feel like there was so much like anti Hootie backlash that happened there, like after they got big and they kind of people just love to hate on them. But I stood by and I think I've been vindicated with Darius Rucker and his resurgence as a country artist. I feel like my. My hoodie love has been completely vindicated now. So, yeah, Hooting the Glowfish. That's. That. That was. That was a song for me.
[00:33:59] Speaker B: I love. That's a first big shout out to Hootie, right? And by the way, you can sit there and say, I told you so. I told you they were cool right at the end of the day. But no good. Thoughtful lyrics, classic songs. You're. You're in there, man. It does say a lot about you, though, about how, how true you are to yourself and in growing up. So that's, that's amazing. So thank you for, for playing along, man. Did you have fun today?
[00:34:20] Speaker A: That was great. Yeah, thanks for having me. This was a lot of fun.
[00:34:23] Speaker B: Beautiful, Beautiful. I'd love to have you back. Give us an update on how things are going with Docker, with Axio, with everything else, and keep it going there. So, team, I want you to take everything you learned today. That was David Kaufman. Follow him on LinkedIn. A lot of great thoughts, insights. He touches a lot of different pricing models. He's applying it as well. So his lessons are going to be something that are going to help you take them on Monday, get 1% better and improve your pricing and packaging. And remember, stop guessing and start growing. Until next time, thank you and much love for listening to the Street Pricing podcast with Marcos Rivera. We hope you enjoyed this episode. And don't forget to like, like and subscribe. If you want to learn more about capturing value, pick up a copy of Street Pricing on Amazon. Until next time.
