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Equity

NEA’s Vanessa Larco says generative AI will change the SaaS pricing model - and that’s a good thing

Jun 12, 2024
Vanessa Larco, a Partner at New Enterprise Associates (NEA) with a rich background in product leadership at Box, Twilio, and Disney, dives into the transformative potential of Generative AI on SaaS pricing models. She discusses the shift toward value-based pricing and its challenges, alongside insights on how major players like Apple might impact startups. Larco also shares her optimism for consumer investing and the future of fintech, emphasizing a focus on small to medium businesses rather than traditional neobanks. A captivating conversation that mixes industry insights with real-world implications!
27:51

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Quick takeaways

  • Generative AI challenges traditional SaaS pricing models by emphasizing value-based pricing over per-user models.
  • Consumer startups thrive by focusing on mass appeal and delivering cost-effective solutions, while FinTech sector supports diverse entrepreneurial ventures.

Deep dives

The Impact of Generative AI on SaaS Pricing Models

Generative AI is revolutionizing the SaaS industry by enhancing productivity in quantifiable ways, such as customer support and marketing. This innovation challenges the traditional per-user per-month pricing model of SaaS businesses. As users become more efficient with AI assistance, the need for increasing seat subscriptions diminishes, potentially stagnating revenue growth. To adapt, exploring consumption-based or value-based pricing strategies becomes crucial for sustained profitability.

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