The Official SaaStr Podcast: SaaS | Founders | Investors

SaaStr 730: How to Price and Package AI SaaS Products with Sandhya Hegde, General Partner at Unusual Ventures

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Mar 15, 2024

Discover the complexities of pricing AI SaaS products, delving into adaptive pricing models, customer needs, and competitive pressures. Learn from successful AI companies, explore nuanced pricing strategies, and debunk cost-centric pricing myths. Dive into optimizing pricing for different customer segments and navigating challenges through iterative strategies.

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ADVICE

Pricing Framework

Design a first-principle framework for AI SaaS pricing.
Consider your company's model, pricing structure, and iterative operations.

INSIGHT

Hybrid Models

AI SaaS companies converge on hybrid pricing models, not just seats plus usage.
This includes seats, service bundles, subscriptions, consumption, and solutions.

ANECDOTE

Pricing Examples

OpenAI uses all three pricing models (subscription, consumption, and solution).
Other companies like character.ai, Huggingface, Cohere, and Nvidia employ variations.

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SaaStr 730: How to Price and Package AI SaaS Products with Sandhya Hegde, General Partner at Unusual Ventures

With everything in AI moving so rapidly, what’s the best way to price Artificial Intelligence products or SaaS tools with custom AI features and integrations? Should it be subscriptions, usage, solutions, or something entirely different? While companies are scrambling to roll out these new tools, they also want reliability and predictability in the value they’re getting from your products, which can make pricing extremely difficult.

So we asked the expert, Sandhya Hegde, General Partner at Unusual Ventures to share her best practices and trends for pricing and packaging AI products. Sandhya has been in the startup ecosystem for about 15 years, with the last two years heavily focused on investing in AI-native startups, primarily on the application and Enterprise software side. Over the past year, people have started to recognize how challenging pricing and packaging are for AI products, as well as the competitive pressure. Why is pricing so tricky?

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