S2E17: SaaS Revenue Bloodbath Is Coming | Rob Litterst (PricingSaaS)

Rob Litterst is on a pricing island, and it's about to get very crowded. After watching traditional SaaS companies fumble with AI pricing, he's going full-time on PricingSaaS to shepherd the entire industry through what he calls "a really interesting rat's nest of questions." The biggest confusion? Everyone thinks agent pricing means outcome pricing. Spoiler: it doesn't.

The Seat-Based Apocalypse Is Here

Rob's take on the death of traditional SaaS expansion is brutal and honest: "Seats are not an expansion lever anymore."

The math is simple and terrifying for legacy SaaS. Startups now operate with drastically fewer people, revenue per employee is skyrocketing, and if you're still charging per seat while your customers' headcount shrinks, you're basically pricing yourself into irrelevance. Marketing teams will shrink first and most dramatically - Rob can already do most of his job with AI, and he's not alone.

The kicker? Even "mom and pop SaaS companies" are now asking about agent pricing. This isn't some Silicon Valley fever dream - it's hitting mainstream faster than anyone expected.

Intercom's Secret Sauce (And Secret Fundraise)

Here's the tea Manny spilled: Intercom just raised an undisclosed round priced entirely on Fin's growth - their AI agent, not their traditional SaaS metrics.

They looked at the pie, saw one slice growing exponentially, and said "that's worth underwriting at a premium." The regular SaaS model? "That's not gonna work." Everything migrates to outcomes eventually, and Intercom's investors just placed a massive bet on that future.

AI Agents Double Every 7 Months, Not 2 Years

Forget Moore's Law and its leisurely 2-year doubling cycle. According to Dharmesh (and Rob's deeply in agreement), AI agent capabilities double every seven months.

This isn't incremental improvement - it's exponential transformation on steroids. Rob's framework: AI currently gets you from A to L, professional services handle L to Z. But that alphabet split is shifting monthly. Companies not charging for outcomes will watch competitors eat their lunch, then their dinner, then their entire business model.

Day AI's "Ergonomic Pricing" Middle Ground

After building HubSpot's CRM, the Day AI founders created something Rob finds fascinating: a hybrid model that's neither pure licenses nor pure outcomes. They charge a flat fee for a range of agent services - outcomes baked into the license.

Rob's watching their margins closely. With their AI costs potentially destroying profitability (they're "blowing through Anthropic Claude Opus tokens"), they're betting they can maintain 60-80% margins through careful credit design. It's the middle ground nobody else has figured out yet.

Vibe Marketing and the Death of Attribution

Rob's confession about his creative process is peak 2025: "I actually have an AI agent that I programmed to read through Tom's book and then spit out five ideas."

But the real insight is about marketing's stagnant state. When Astronomer hired Gwyneth Paltrow for a campaign, Rob's reaction was telling: "Who cares about attribution at that point? They just nailed it."

In a world where marketing is "very, very stagnant" and everyone's doing the same playbook, vibe marketing - shipping campaigns quickly to see what explodes - might be the only differentiator left.

The Companies That Need Rescue

Rob's ambulance is heading for:

• Miro (commoditized whiteboarding needs pricing innovation)
• MailChimp/Benchmark Email (email is a commodity, pricing is the differentiator)
• Sprout Social/Buffer (getting eaten by creator-specific tools like Taplio)
• Gong (what was special is now everywhere - "the atomic unit of the new era of CRMs")

The pattern? Any product that feels commoditized needs pricing as a lever, fast.

Rob's Master Plan

PricingSaaS isn't just another consultancy. They're building:

• A data feed tracking thousands of pricing pages in real-time
• Private questions feature (because pricing strategy is too sensitive for public forums)
• Eventually, a chat interface that becomes the pricing oracle for all of SaaS

Why private questions matter: "Pricing is so tightly correlated with your strategy... you don't really want to signal anything to competitors."

Companies Mentioned

• Intercom
• Day AI
• Salesforce
• HubSpot
• Astronomer
• Notion
• Gong 
• Miro 
• MailChimp 
• Sprout Social 

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.