Ep #17: AI usage costs are destroying SaaS business models

Over the last 30 years, software pricing has evolved from on-prem licenses (Software 1.0) → cloud subscriptions (Software 2.0) → and now the era of AI-powered, compute-dependent pricing (Software 3.0). What does that mean for founders, product leaders, and anyone building SaaS today? A LOT.

In this episode, we cover:

-Why freemium is dying in the age of AI
-How compute-heavy AI workloads change your unit economics
-Why SaaS companies may need two pricing models (software access + AI usage)
-The messy world of credits, API calls, and tokens
-How PLG and SLG are merging into a hybrid growth model
-The real risks & opportunities in usage-based and outcome-based pricing
-Whether AI features make SaaS more or less profitable
-How “brand taste” in AI models (GPT vs Claude vs Grok) affects perception and pricing
-Why AI might force even enterprise SaaS to offer playgrounds, demos, and hands-on trials
-A spicy segment on token arbitrage 👀 (Nick’s Dumb Idea of the Week)

Corey breaks down the economics.
Zach unpacks how this impacts product + growth.
Nick asks the questions everyone’s thinking.

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The Factory Floor is hosted by the three co-founders of Conversion Factory, the marketing agency at the forefront of SaaS growth, marketing, and tech trends. Episodes are released on Twitter one day early, @coreyhainesco 

Every other week Corey, Zach, and Nick break down what’s working right now in SaaS marketing, share real-world lessons from the field, and give you the strategies you need to outpace the competition.

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