Price Punch: Pricing Hustle Lessons | Fynn Glover (Schematic)

Episode 32 November 05, 2024 00:32:02
Price Punch: Pricing Hustle Lessons | Fynn Glover (Schematic)
Street Pricing with Marcos Rivera
Price Punch: Pricing Hustle Lessons | Fynn Glover (Schematic)

Nov 05 2024 | 00:32:02

/

Show Notes

 Are you facing engineering bottlenecks with your pricing systems? Discover how early decisions can impact your SaaS scalability and what you can do about it. 
 
Join me for a game-changing conversation with Fynn Glover, the visionary co-founder and CEO of Schematic. Fynn opens up about his entrepreneurial journey from lifestyle media to B2B SaaS, where he confronted the daunting challenges of scaling a company due to pricing pitfalls. His candid story reveals the pivotal lessons learned from instinct-driven pricing errors and how these hurdles led to the creation of Schematic, a solution dedicated to demystifying complex SaaS pricing structures. 

We uncover the critical importance of understanding customer willingness to pay, especially when your business is in its infancy. Through Fynn's experiences and my own, we emphasize the power of engaging potential customers early on—at least 50 conversations deep—to truly gauge market interest. This strategic approach helps mitigate risks and unlocks a product's perceived value. Discover the essential questions that can reveal customer urgency and the external factors influencing purchasing decisions, equipping SaaS founders with actionable insights to build a robust pricing strategy from the outset. 

Pricing systems in high-growth companies often face integration challenges, demanding foresight and strategic engineering decisions. We share firsthand experiences where seemingly simple pricing tweaks became major engineering undertakings, highlighting the need for adaptable systems that support swift, impactful business choices. Looking ahead, we explore the evolving landscape of SaaS pricing and packaging, the empowerment of B2B buyers, and the transformative influence of AI on software solutions.  
 

In this episode:  
(00:00) Intro and background of Fynn Glover, journey from founding a lifestyle media company to transitioning into B2B SaaS, emphasizing the critical missteps in instinct-driven pricing models that hindered growth and led to the creation of Schematic. 

(0:08:19) The importance of understanding customer willingness to pay in the early stages of a business. Fynn advocates for extensive conversations with potential customers to validate market interest and reduce risk, thereby informing effective early-stage strategy development. 

(0:15:00) Most common challenges high-growth companies face in managing pricing changes across various system stacks. Fynn illustrates how early engineering decisions can impede scalability and emphasizes the necessity of foresight to avoid costly setbacks, highlighting the often-neglected prioritization of monetization in product development. 

(0:25:13) The evolving landscape of SaaS pricing and packaging standards, reflecting on the separation of concerns between business and engineering decisions. As B2B SaaS buyers demand greater flexibility, the role of AI in integrating cost implications into usage-based billing presents an open question for future software and business strategies. 

(0:27:30) Reflections on the transformative role of AI in software, underscoring its dual nature as both a tool and a creator.  

(0:33:44) Favorite jams - Mark Knopfler  

Welcome to Street Pricing, the only show where proven SaaS (Software as a Service) leaders share their mindset and mistakes in pricing so we can all stop guessing and start growing. Street Pricing is hosted by Pricing I/O CEO and Pricing Coach, Marcos Rivera, sought after slayer of bad pricing. With 20 years of pricing expertise, he has helped price over 200 SaaS products and coached over 100 SaaS CEOs and counting! From the streets of the Bronx to CEO, Marcos wants to take the guessing out of pricing.   

Resources: 
Fynn Glover LinkedIn 
Schematic  
Marcos Rivera LinkedIn 
Book: Street Pricing 
Email Street Pricing for a consultation  

View Full Transcript

Episode Transcript

[00:00:00] Speaker A: In five years, I hope that a standard has emerged for product and engineering folks around how to implement pricing and packaging into applications in such a way that there is a very clear separation of concerns. [00:00:15] 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. Let's break it down with your host and sought after Slayer of bad pricing, Marcos Rivera. [00:00:38] Speaker C: 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 man on a mission. I really admire a lot of the hard work he's putting in, and this is gonna be a lot of fun. Today, I have Finn Glover, who is the co founder and CEO of Schematic. Finn, welcome to the show. [00:00:57] Speaker A: Mandy, thank you so much for having me. Marcus, it's awesome to be here. [00:01:00] Speaker C: No, awesome to have you as well, man. Why don't you do me a quick favor? Tell everyone a little bit about you and what you do. [00:01:05] Speaker A: Like you said, my name is Finn. Right now I live in Atlanta, married, two kids. A year ago, I co founded a company called Schematic. We are trying to make it a lot easier for product engineering folks to implement pricing and packaging into their applications. Really good way to think about the product is it's a layer that sits between your application and stripe to help you manage plans and pricing and packaging and features and all that stuff. [00:01:29] Speaker C: A layer that indeed is, I think, growing more and more important as prices getting more and more complex, we'll get into all that kind of stuff here in just a little bit, man. But from my perspective, there's a lot of companies who maybe in years past have thought, like, well, pricing is just this thing downstream that just needs to happen, and we just need to get money. But then as solutions expand and other things begin to take place, like the rise of usage based pricing and other things like that, now you're realizing, like, uh oh, this actually takes a little more work to make happen and create whatever it is, quotes and invoices and other things on the other end. [00:02:04] Speaker A: Right? [00:02:04] Speaker C: So we're going to unpack that together. But first, I want to give everybody just a quick roadmap on what we're going to do today. So this show is based on the book street pricing. So we're going to break it down into three different parts. The first one is rewind. We're going to talk about a story of a struggle, success, pricing and packaging that you can share with everyone and also the great things that you learned. And then we're going to bring it back to today in play. And so this is where we're going to talk about really relevant, germane topics that are top of mind right now in these days. And then we're going to go in a fast forward where we'll say, okay, where's this stuff going in the future? Maybe look a little bit ahead for everybody. How does that sound, Finn? [00:02:41] Speaker A: That sounds great. [00:02:43] Speaker C: All right. Terrific, man. So excellent. If you're good with that, you're ready to get street with me, then let's go ahead and start opening things up with your story. Go ahead. [00:02:51] Speaker A: I've mostly been an entrepreneur and operator in SaaS. My first company I founded when I was 23. It was originally founded as a lifestyle business. We were very much a media company, sort of bordering on location based application. And about four years into that business, we pivoted from media into B two B SaaS. And it was a pretty cool experience because we grew quite quickly to the point where we could raise a series a start really building out the team and going after this big opportunity that we thought we saw. And what ended up happening was the business effectively got stuck for about three years, between 1,000,005 and 2 million in ARR. And that was a really agonizing time period for me because I felt like I was slamming my head into a brick wall. You've raised venture capital, you feel like you're destroying your reputation with investors, you've recruited these people, the business isn't growing. And eventually what ends up happening is the company was acquired in a small tuck in after what was effectively a ten year effort. As I reflected on that experience, one of the things I did is I went to our independent board member, a guy named Justin Tallarico, who is an incredible SaaS operator, been a CEO, helped Linux Academy merge with a cloud guru, helped the a cloud guru deal get done with Pluralsight, is now the CMO of Automoxe. And I asked him several months after our acquisition what he felt like our biggest mistake had been. And he was the first person who told me, I think your biggest mistake was pricing and packaging. And I think that the biggest regret I have as a board member is when I joined the board, I didnt really push on you to go do really formal pricing and packaging discovery. He said that to me right about a time when I was listening to some podcast, wherever the person interviewing the guest effectively says, I think founders are good at a lot of things, but I think one of the things that they really are just not intuitively that great at is pricing and packaging. And it resonated so much. And when I look back at my journey as an entrepreneur within that first company, what I realized is I had changed pricing and packaging a dozen times in those last three years. And each time I had changed, I was pursuing a gut instinct on how we might grow through this stall. And I not once went and talked to customers about how we should price and package. I had different customer types. I was transitioning from services to SaaS. There was a lot going on. And had I just known how to go talk to customers about willingness to pay, I think the business could have been a much bigger outcome. And I think that I could have achieved that outcome far faster without a lot of the pain. And it was just a particularly formative moment for me to hear Justin, my board member, describe that because it was so clear and so clarifying. [00:05:45] Speaker C: I have to say that that is a very raw and honest answer. Right. When you're thinking about a story and what had happened, the fears that were kind of the back of your mind around trying to drive growth, you're not growing, you're feeling stuck, you don't know what to do. You're driving, trying to drive your head through a brick wall. I love the fact that you were open to feedback and humble enough to ask for, you know, ask someone you trust, what was that big mistake that you think we made? And the fact that he's someone with the deep experience and someone who's seen companies succeed and not succeed. That he said pricing and packaging was one of the big ones. I think all that is, I think now should sync really well with the audience and folks listening in right now. Because if there's a little bit of a fear in the back of your mind that, oh, gee, I think there's a blind spot here in how I'm monetizing the value of trying to build. I mean, let's face it, right, in any B two B SaaS company, the building is hard, right? You have to make sure you're building the right stuff, prioritizing it. You got also deals and flow, you got operational things you got to sort out. There's financials, there's boards, investors. It's a lot happening and throwing at you and then pricing and packaging in many cases tends to fall downstream a bit, maybe even neglect it a little bit mildly, and then a quick change a price increased 10%. That happens in a knee jerk or happens in just a, hey, let's just throw something on the wall and see it sticks. Is actually not really a thoughtful, data informed approach to pricing and packaging. And the biggest piece of data, you said, was talking to customers, and you were missing that. [00:07:23] Speaker A: Yeah. And at the time, as I reflect on it, I wouldn't have known how to talk to them about pricing and packaging. And having since learned how to talk about pricing and packaging with customers, I view that as, like, one of the most, I would say, top one or two tools that I've picked up along the way is how to go structure a conversation with a customer about pricing and packaging. Feels to me like one of the most force multiplying tools I've picked up in the last 15 years. [00:07:48] Speaker C: Force multiplying, indeed. I think there is a way to talk to customers about pricing and packaging. And oftentimes I come from a more of a value angle. It's a little bit more meaningful to them. Sometimes when I do a pricing survey, I don't even say the word survey with the word pricing. I just talk to them about really what they want, what they don't, and understand a little bit about their. About their needs a little deeper. It's just something that, as a product person, came with many, many years of building software products, and I think you were also picking that up as well. So if you had a think through now, like, if you were to rewind back at that time, right when you were running that company, knowing what you know now, which is always a lot more, what would you tell the Finn back then? What would you tell them to do? [00:08:32] Speaker A: Well, what I did tell the Finn of today, because a year ago, I started a new company with co founders that had been with me on that first company. And before we even started the company, we were thinking about willingness to pay for the very kind of early embryo of an idea. And we ended up doing, I mean, at least 50 conversations with folks before raising any money, before starting the company, to basically prove to ourselves that we thought willingness to pay existed in the market, and we knew this idea may not be the idea we end up building against. This idea may change over time, but if we don't have enough conviction on the early hypothesis that there is a market that wants to pay for it, we don't want to go in this direction. It's too high risk. It's too much risk to go spend another ten years building in a slog. And so, yeah, that was effectively it. Go talk about willingness to pay at pre idea idea, right after you start the company, right after you win. The first few customers, like constantly be listening for value and willingness to pay. That's the main lesson I have tried to teach myself and reinforce kind of in this second effort. [00:09:39] Speaker C: Yeah, it takes discipline to keep it top of mind as well with the other 150 things probably happening at the same time. When you do that and thinking of willingness to pay and doing it this early, I think does change the decision making dynamic a little bit. And so what is your favorite question to ask a customer about willingness to pay? If you had to pick one? I know there's a few, but which one would be your favorite question to ask them? [00:10:04] Speaker A: It sort of depends on whether or not I'm actually running a real conversation around willingness to pay versus I'm actually trying in a demo and I'm really trying to evaluate their urgency to solve the problem with my product. If I'm in a sales conversation, the question I like to lean back on is on a scale of one to five, five being you feel like this is a really good fit now, and weve already kind of talked about pricing. One is you dont think this is a good fit for your business right now. Where do you think you land? And that teaches me a lot about urgency. And again, ive already brought up price in the context of the demo and the sales conversation, and so theyve seen that its in the back of their mind. And then getting them to really hone in on that number of fit and timeliness has taught me a lot. If I'm in a willingness to pay conversation that is more structured and more intentional, and they know what they're getting into with me, I ask eight questions, but I think my favorite is a certain way through. What is the maximum you would be willing to pay for this product? And again, there are seven other questions I'm asking in conjunction with that one, but that one is always the one where rubber hits really hits the road. [00:11:12] Speaker C: Now you're forcing them to even say, here's the number. I'm thinking of that number by itself, whatever it is, high or low, says a lot. [00:11:20] Speaker A: Says, right, like that's your value. Like that's your product's value right there. [00:11:24] Speaker C: Your product's value. Their perception. What's shaping that perception? Why do they think that way? What would change it up or down, like those kinds of things? I think that is no wonder you have seven or eight other questions around it. Right. But I think that the urgency thing is a really interesting one that you brought up. Because urgency is another signal, right. In terms of, like, how bad the pain is and that price value equation that's in every customer's mind like that, trying to balance. If that urgency. If they say a five versus a one, I'm sure you follow up differently. But what if they say it's a three? [00:11:56] Speaker A: Yeah. Well, if they say it's a three, there's typically a follow up question, which is, what would it take for us to get you from a three to a five? [00:12:03] Speaker C: Got it. [00:12:04] Speaker A: And what I'm looking for there is, is there some change in their business or is there some deficiency in my product? And their answers may sort of influence, again, my follow up. Right. Like, it may be, it's just not the right timing. It may be like my product is not mature enough yet for them. [00:12:20] Speaker C: And that also can reveal a little bit of what their value drivers are. Like, what really matters to them. But it also could mean other things outside of your product. Like you said, could. Maybe there's a risk thing, maybe there's a fear of change, or there could be some dependency that's outside of your product that you don't even know or see. This needs to be done first before I could buy your stuff. Oh, actually, I didn't realize that. Right. And so those things could be really, really useful, man. I think just these couple questions and tips for the founders, the B two B SaaS operators out there listening. I think this can be a really useful thing to think through and implement right away, man. So thank you for sharing. Sharing that story, if you had, again, as you go through there, and that willingness to pay conversation, bringing it early on into the journey is a phenomenal first step for a lot of folks, and it's not usually the first thing they're thinking about, but taking it now from the past to the present. 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. So you're a busy guy, right? I mean, there's a company that you're trying to grow. There's a problem you're trying to solve. You're also promoting. At this stage of being a founder, you have to make sure people know about your stuff and know how awesome it is, right. And so you're out there and you're solving these things. And I imagine though, as you're doing this, this layer between stripe and the product. Right. And trying to make sure that it's, again, removing the shackles that are on a lot of companies so they can price in the best possible way, you're probably seeing a lot of different flavors of the problem. Can you break down some of the most common obstacles that founders have to really fulfilling their full pricing and packaging potential? [00:14:16] Speaker A: Yeah, for sure. I think in my own experience, what I have learned is the founder of the early stage business often struggles with these value questions. What is the value of my product? Do I have the toolkit to learn from the market about my value early on? The other part of my learning has been as a company achieves product market fit and really starts to grow and there's legitimate customer volume and there's rapid product maturation, there becomes a really fascinating systems problem that operates on pricing and packaging. And what I mean by that is, let's put yourself in the shoes of a $20 million software business or a $30 million software business. Pricing and packaging should be continuously evolving with the continuous evolution of your product. You're shipping new value constantly. And yet many companies struggle to align those two roadmaps. And one of the reasons they struggle to align those two roadmaps is, again, maybe they don't have people who are focused on pricing and packaging. Maybe it's an afterthought. But they also have a systems problem. And that systems problem is that there are multiple stacks, so let's call them categorical stacks, that are actually operating on the pricing and packaging of the business. The first stack is your sales stack, your CRM, your CPQ product. The other stack is your finance stack, your billing product, your subscription management product, your ERP. And then there's this other stack, which is your product stack. It's like your feature flags, your entitlements. It's how you're metering in the product. And what's fascinating about this is there is almost never some natural connection across these stacks. If you want to go change pricing or packaging, a change in one place is a change in many places. And it's not just a change in stripe and salesforce, it's a change in the product. Which means if you want to go make changes to pricing and packaging, engineering is always critical path. And that was the experience that I ran into, and I was leading pricing and packaging at a series C company. It was effectively that and what sort of ended up happening is it took me two quarters to go make a relatively simple change to pricing and packaging. And that was like an eye opening moment because it was like, this is a high growth company, this change should be rapid subsequent to the analysis, and we cant roll it out. Our competitive advantage is speed and we cant roll this out. And its because of this systems problem. And so what I learned after many, many interviews with CFO's was the CFO would say we just can never get enough engineering resources. So I shifted all my conversations to ctos. And the CTO would typically say a lot of this often comes back to an early decision we made to hard code pricing and packaging logic into application code. This is described in a variety of ways. You might say, yeah, we've hard coded entitlements and we've tied them to a plan id in the billing system. We're using feature flags as entitlements, but they're disconnected from billing. You hear this described in a variety of ways, but really what's going on is pricing and packaging logic is hard coded and config files in applications. And so again, engineering is critical path to what should be business decisions around pricing and packaging. [00:17:39] Speaker C: That has to be the most frustrating feeling. I got to ask you, right, if your competitive advantage is speed and your ability to be nimble and react, and it takes you two months to make a simple pricing change, like it's gotta be, you gotta wanna pull your hair out. [00:17:55] Speaker A: Well, and yes, you pull your hair out because you've got ownership, like you're trying to drive value. You feel like, at least in the experience I'm referring to, I felt like there was millions of dollars in incremental value that we could drive, couldn't drive it, right. And it actually took more than a quarter. And in that case, what's interesting too, to kind of reflect back on it, is the initial analysis had been done in late 21. So if you remember late 21, early 22, when we actually roll stuff out, the world has changed economically. And so the analysis that we had done had actually become stale. Thats really frustrating because your analysis had been probably pretty correct. By the time you roll it out, youre a little bit stale, youre a little bit off. Then theres all kinds of frustration in the business. [00:18:39] Speaker C: So now you have stale analysis, by the way, which didnt come for free. You did some hard work to get that. And then secondly, a quarter to get something rolled out. Now think about what a quarter means in a recurring revenue business, right. If you were able to do something a quarter sooner and get and reap the benefits of the new pricing and packaging that accumulates over time. And also all the customers that you had to win during that quarter on the old stuff that you now have to turn around and find a path to the new stuff. Right? Like this is this compounding thing. And I think that you made a really, really strong point here about the, you know, just in general here that there's. There's these early decisions. Like the decision, a hard code, was not something that just happened. Like, this was something that came way early on the business. And so it's kind of this dormant problem that you don't really see just yet until you're gaining traction, growing stuff's happening, right? Things are moving, and then it comes back and bites you later. Right. And so I bet you there's folks listening right now who probably don't even know they have this problem ticking behind them. And it hasn't shown its aureus ugly head yet, but it may spring up and bite them later. [00:19:50] Speaker A: It's 100% an emergent problem. There becomes this moment in the business where, oh, now we are stuck. And it's inconsistent when that moment is. It can be early on, it can be later on, but there comes that moment. And there's a guy that I've talked to a lot about this who's, whose description of it I love. He is a director of engineering for calendly on the growth side of things. And he basically describes it as, if you think about monetization as monetization in applications, it is almost never a first class citizen. In products, it's always second class. And so, as engineers, we're trying to do the fastest thing possible, and so we're kind of responding to the business needs, and we're prioritizing based on the business needs. And so we make the kind of, like, easy decision today, but in the future, that decision comes back, and we end up paying back that debt for many years. And what that means for engineers often is, like, you eventually have to do some type of refactor, and that refactor means you're pulling your most expensive resources off of new innovation. To go work on billing, to go work on, like, the systems that govern pricing and packaging, to go, like, build these internal services, like, product catalog, like, entitlements, like metering, and engineers don't want to work on that. And it's not core innovation. And the business is kind of dealing with a pretty significant reduction in time to value. [00:21:15] Speaker C: Yep. Yep. And then which by the way, is okay because at the time, like, this stuff is not on a sales demo or it's not on a customer's wish list. So why make it so important? [00:21:26] Speaker A: Right. [00:21:26] Speaker C: But it is, it takes that discipline to pull it out. And you're talking to these companies and I bet you you're seeing this, this in very clear 2020 vision right in front of you. How do you help them maybe realize that this is an emerging problem that may not pop up in front of them until it's going to be really expensive and hard to fix? How do you let them realize that this is happening? [00:21:50] Speaker A: That's a great question. I think there are two things that I've noticed. What I'm trying to do is I'm trying to evangelize a problem, and I'm trying to evangelize a problem in such a way that it's accessible to earlier stage companies so that they dont have to go down that path. They dont have to incur that debt. They can create a separation of concerns from day one. You should not have to hard code pricing and packaging. You should never have to do it. It should be out of the box the way you manage plans and pricing in your application. But early stage companies dont know that this is a problem yet. There needs to be a lot of evangelism in education. They realize, hey, theres this standard that we could just plug in from day one, and this is great. I wont have to think about billing if Im an engineer. [00:22:38] Speaker C: I think that does it right there for me because theres a trade off you need to make if youre going to invest in it, which I think youre advocating for. Theres something that theyre not working on. If theyre working on this, I think you have to be, I think, courageous and explicit in making that trade off. And Im not sure a lot of companies are willing to do it yet. And maybe it's because they just don't, don't know. Or maybe it's a problem to fight another day, like when folks push back on you and say, no, no, no, Finn, you're full of it. This is not, this is not that big of a deal. We can deal with it later. What's your rebuttal to that? How do you get respond to the folks that don't believe this might be. [00:23:17] Speaker A: Another learning from company number one. But company number one, I felt myself doing a fair amount of challenger sales. And company number two, if somebody says that to me, im like, sounds like were not a good fit right now. And I just let it be and kind of continue to evangelize. Right. Because my point of view is if youre an early stage company, you may not be problem aware yet. And so we need to create a standard in the same way that if we go back ten years, for a long time people were building an authentication in house, then there came a point when, no, I'm going to use auth zero. Of course I'd use auth zero for authentication, but before auth Zero, I would never outsource authentication. It's always done in house. A standard was created and I think similarly there can be a standard for how pricing and packaging is implemented in applications that can emerge and companies will just plug it in later stage companies. It's a quite different conversation because totally get it, totally feel the problem. We have full engineering teams working on billing. It's massively expensive, but this is going to require a real refactor to clean this up. And then the question is, is it worth it to do the refactor or is it worth it to continue to pay the tax of the debt? And that's a company decision. And I don't try to challenge too hard on that because they know better than I do. [00:24:39] Speaker C: Yeah, because there's probably other downstream things related to that as well that you don't have any visibility into. But I think that's a, when you think about the standard, following the standard, especially in this world, has moved a lot of perceptions around what's critical, what's done in house, what's done out of house, where it changes the shape of the stack over time as you're building new solutions in this world, I think AI is going to start creeping into that here pretty soon, which is a segue into the last piece here, which is the fast forward into the future. Man, really great thoughts on maybe becoming a standard. I kind of really triggered a few extra things for me. But to push things forward, let's say not even ten years, let's say five years from now, do you see standards emerging in areas of billing and AI, which I know are two different areas, but they're the most talked about right now. Do you see anything there or have questions around that in your mind? [00:25:38] Speaker A: I have lots of questions. In five years, I hope that a standard has emerged for product and engineering folks around how to implement pricing and packaging into applications in such a way that there is a very clear separation of concerns. And what I mean by that is the business can go make decisions around pricing and packaging that don't require engineering cycles to support engineering and product can focus on driving innovation. They don't have to think about billing. They don't have to think about implementing a change to support maybe kind of a new add on or a new package or a new tier. It's just a non thought. So I hope that emerges. I hope we play some role in pushing that standard forward. I think that there is a standard architecture that consists of five components that I can talk about ad nauseam, but I think that we conceptually understand what the standard should look like. Developers and product managers will need the tooling to actually, for that standard to actually emerge and manifest. In terms of the questions I have, whats fascinating to me when I look at the last ten years, and I think this is a segue into the next five, what stands out to me most is the B two B SaaS buyer has become more empowered in the last ten years. And you can see that empowerment and the flexibility that they demand from vendors across three main dimensions. The first is how they buy, which has led to the rise of hybrid go to market product led sales, led channel led, marketplace led. Like vendors are having to support multiple sales motions because the customer is empowered. The same thing is happening in billing. Vendors are having to support hybrid billing, seat based billing, usage based billing. Some hybrid of the two again comes back to a customer that wants flexibility and how they are billed and what they're paying for and what their value metrics are. And the third is I want flexibility in what I buy. I may not want to buy the full kitchen sink. I may want to buy portions of your offering. I may want to buy bundles. Give me that flexibility. And so I think what we see over the next five years is vendors continuing to figure out how to operationalize answers to the customer's demand for flexibility. What does that look like? I mean, I think one of the most outstanding questions that I do not have an answer for that feels satisfying to me is there's this saying that AI is eating AI, excuse me, software is eating software because of AI. But AI is not zero marginal cost. And so software was, and I don't really know how to reconcile these, because every time I talk to a venture backed founder, they're not worried about the costs, right? Because the LLMs are making the costs so accessible. And so I'm pretty interested in, I want to try to find an answer to that question for myself because I feel really dissatisfied that I don't know how the cogs associated with AI are going to impact the way we run usage based billing and hybrid billing might be the way to put the best way to describe it. [00:28:38] Speaker C: I think that's a really fantastic question because I don't think anyone knows how those costs are going to play out. In addition to that, we all have notions that they go down over time. I think no one would argue from what they've seen in the last 1020 years, but software eating software, even AI. The thing about AI is that it is software, and then it's not as well, like, so it is the software. It can build the software and be the underlying infrastructure for creating more of it or of itself, and it can enhance other software as well and supercharge it. So it's almost this, like, gray matter that's floating around here that you can shape. It's not easy to pin your finger on it, which makes it harder to even understand how the cost implications and how it'll evolve over time. It doesn't quite fit in certain boxes, if you know what I mean. So that's kind of where I think is driving a lot of the what ifs behind that. [00:29:32] Speaker A: Yeah. Yeah. I mean, it's an incredible time to be alive. Like, I'm blown away by what's happening personally. [00:29:37] Speaker C: You kidding me, man? I was ecstatic when I was playing Oregon trail in, like, freaking, you know, and in, like, you know, old mainframes and things like that. So I'm. What I'm seeing today. I mean, man, it is. It is a fun time. And so what this next wave is going to look like, I just can't wait to see. I hope, you know, cross my fingers and knock on wood that I'm around for the next 10, 20, 30 years to kind of see it play out. But listen, man, thank you so much. But you are so thoughtful, cerebral in a lot of ways, and I love it. Love talking to you. But I do have one more question. And I use this to humanize folks, right, because they might think, wow, Finn is like this machine, right? You know, maybe he's AI. We don't even know it, right? So I wanted to give everybody, everybody has since. So, Finn, what is your favorite jam, your favorite song growing up, man? What was it? [00:30:30] Speaker A: There are three that really compete for the top spot. And even now, it's like a game time decision, probably. It's a song called what it is by Mark Knopfler. He was the lead for dire Straits, and when he went on his own, he produced a song called what it is that I think is. It's one of the most beautiful songs ever made. And I listened to it. When I, when I'm out, like, and I want to go do like, a big run in the mountains, that's when it becomes my turn, too. [00:30:57] Speaker C: So how do you feel when you listen to it? What's the one word if you had to describe it? [00:31:01] Speaker A: I mean, alive. [00:31:02] Speaker C: Alive. What is excellent, man. Finn, I appreciate you coming on here and dropping these knowledge bombs for all of our SaaS community listeners. Would you be willing to come back in the future? [00:31:12] Speaker A: I would love to. Thank you so much for having me. [00:31:14] Speaker C: Oh, man, this is so much fun. Team. That was Finn Glover. He has great content, by the way, on LinkedIn. I recommend you follow him and take the lessons and the deep thinking that he offered today and some of the, I think, raw decision making that he put out there. Take it home, take it a Monday and try to get 1% better and move away from that guesswork. All right? So remember, stop guessing and start growing. Until next time, thank you and much. [00:31:41] Speaker B: Love for listening to the street pricing podcast with Marcos Rivera. We hope you enjoyed this episode, and don't forget to like and subscribe. If you want to learn more about capturing value. Pick up a copy of street pricing on Amazon. Until next time.

Other Episodes

Episode

September 10, 2024 00:41:37
Episode Cover

Pricing Fraud with Finesse | Tyler Adams (CertifID)

What if your real estate transaction could be hijacked by cybercriminals in mere seconds?   Join me in a discussion with Tyler Adams, co-founder and...

Listen

Episode 21

May 28, 2024 00:33:13
Episode Cover

The Dirty Secret of Dynamic Pricing | James Martin (Rally Corp)

Listen in as James Martin Sr., CEO of RallyCorp and an esteemed RevOps coach, joins me to unravel the complexities of tailoring pricing models...

Listen

Episode

August 27, 2024 00:32:33
Episode Cover

Building Up Your Pricing from Zero to Clio | Min FitzGerald (Clio)

Join me for a conversation with Min FitzGerald, the Director of Monetization at Clio, who shares her transformative journey from management consulting to leading...

Listen