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AL

Aaron Levie

02/20/25

@ Y Combinator

Successful companies are increasingly replacing traditional services with usage-based models, leading to rising revenues without the need for annual contracts.

Video

YC

How AI Is Changing Enterprise

@ Y Combinator

02/20/25

Related Takeaways

YC

Y Combinator Cast

01/25/25

@ Y Combinator

Companies achieving high revenue are often using usage-based pricing models, which align costs with actual product usage, simplifying the sales process.

HI

Harvard Innovation Labs Cast

02/02/14

@ Harvard Innovation Labs

The shift from selling products to offering services or subscriptions can lead to predictable revenue streams and increased customer retention.

AB

Amit Bendov

05/20/25

@ Sequoia Capital

The future of sales will see a shift towards usage-based pricing models as companies become more efficient and require fewer seats.

MM

Macy Mills

05/17/25

@ a16z speedrun

Usage-based pricing, where customers pay based on consumption, is gaining popularity, especially among cloud providers and AI products, as it scales with user demand.

SB

Steve Ballmer

06/02/25

@ Acquired

We aimed to create a recurring revenue model with the enterprise agreement, which allowed companies to pay a fixed amount annually for software usage.

HI

Harvard Innovation Labs Cast

02/02/14

@ Harvard Innovation Labs

In a SaaS business model, long-term subscriptions change the visibility of revenue, allowing for more accurate forecasting based on customer retention and upsell rates.

BT

Bret Taylor

05/08/25

@ Sequoia Capital

The transition from traditional software sales to outcomes-based models is challenging for incumbents, but startups can leverage this shift to their advantage.

YC

Y Combinator Cast

01/25/25

@ Y Combinator

The pricing model for AI tools is shifting towards usage-based pricing, making it easier for companies to justify ROI and shorten sales cycles.

MM

Macy Mills

05/17/25

@ a16z speedrun

Subscription-based pricing offers predictability for both businesses and customers, often combining user-based pricing with monthly or annual subscriptions.