"Unpack Pricing" with Scott Woody

Nicolas Kopp, CEO and founder of Rillet, an AI-native ERP company, discusses the revolution in financial systems brought on by AI. He highlights the issues with legacy ERPs, which have become fragmented data repositories, and stresses the importance of clean, integrated data for transformative automation. Nicolas explains how generative AI can be leveraged in accounting while emphasizing the need for adaptability in finance teams. He also delves into pricing strategies and market trends, showcasing how modern tools can significantly speed up financial processes.

In this episode of Unpack Pricing, Scott Woody, co-founder and CEO of Metronome, is interviewed by Chris Kent, SVP Marketing at Metronome. Scott Woody examines AI's transformation of software from seat-based access to agentic work performance, ushering in a "third era" demanding consumption-based pricing. Unlike monopolistic power companies, customers now require visibility, control, and predictability in billing. Woody critiques Silicon Valley's product obsession while neglecting monetization as a core discipline, advocating for marrying sales-led and product-led growth. He predicts monetization will become essential for AI-native business success. FULL TRANSCRIPT AVAILABLE HERE: http://metronome.com/podcast/unpack-pricing/pricing-as-product-the-monetization-operating-model-in-action __ LinkedIn/Twitter Follow: Scott: https://x.com/l3ammhttps://www.linkedin.com/in/scott-woody-21677121/ Chris: https://x.com/_chriskenthttps://www.linkedin.com/in/the-chris-kent/ -- Check out: Metronome: https://metronome.com/ -- Timestamps: (00:00) Intro (01:48) The epochal shift in software pricing that motivated the white paper (02:41) How AI is fundamentally transforming software value from access to work (03:01) The three distinct eras of software pricing throughout history (05:32) How AI agents performing work ushers in the third era of pricing (07:25) Whether companies or customers are driving the shift to usage-based pricing (09:02) How 15 years of AWS usage educated customers about consumption models (10:33) The challenges facing companies transitioning from the access era (13:00) How every department except HR is affected by the monetization shift (14:45) How successful companies navigate the cross-functional transformation (16:05) The dangers of changing monetization models too quickly (16:31) The smart strategy of launching new AI-native product lines (18:49) The Dropbox revelation about treating pricing as a product (20:00) How companies without proper monetization are essentially running charities (22:59) The three critical pillars of successful usage-based pricing (23:19) Power companies as an example of terrible usage-based pricing (27:31) What happens when AI companies get pricing visibility wrong (31:16) The massive infrastructure requirements for billing at scale (33:19) Metronome's vision to become the AWS of monetization (36:55) How billing complexity can catch companies off guard during growth (40:28) The monetization operating model framework (44:39) The challenge of marrying sales-led and product-led growth (45:58) Advice to founders about achieving pricing product market fit (48:54) What will become obvious about monetization in five years (50:32) How pricing becomes the primary competitive battlefield (51:23) Wrap

Ryan Campbell, Director of Product Finance at Snowflake and former Air Force officer, discusses the transformation of Snowflake's pricing model. He explains their shift from cost-plus to usage-based pricing, highlighting the need for simplicity in customer billing. Ryan shares insights on aligning pricing with customer value, the complexities of AI pricing, and the importance of implementation details in price transformations. He also touches on predictive methodologies for fluctuating usage patterns and how pricing strategies connect with overall business goals.

Giang Hoang, Director of Business Operations at Zapier, has been pivotal in transforming their pricing strategy from a single product to a multi-product platform. She dives into Zapier's five core pricing principles and the upcoming shift to flexible, 'pay-per-task' billing to enhance customer experience. Giang discusses the importance of integrating customer feedback and the role of AI in shaping pricing models, as well as the relevance of clear communication and change management in making successful pricing transitions.

Brandon Walsh, PM Director at HubSpot, and James Brown, Chief Product Officer at Metronome, dive into the transformative power of usage-based pricing. Brandon draws on his experience from Intercom, highlighting how this approach enhances customer focus and turns every team into a 'customer success team.' They discuss the evolving role of product managers, the strategic balance between building and buying billing systems, and how AI is revolutionizing pricing strategies. Brandon encourages bold pricing innovations while maintaining flexibility for rapid iteration.

Tomas Lorinc, Head of Monetization at Temporal Technologies, is a pricing expert formerly with Auth0 and Okta. He shares insights on overcoming the fear of price changes by fostering an experimentation culture. Discover his strategies for field testing pricing models and creating high-trust environments. Tlo emphasizes the balance between art and science in pricing decisions and the importance of effective pricing councils. He delves into segmenting products for enterprise markets and the significance of consistency in complex product portfolios.

Justin Farris, VP of Product and Monetization at GitLab, shares insights from his journey at Zillow to his role in a leading DevSecOps platform. He discusses how GitLab harmonizes product-led growth with enterprise sales through a transparent pricing model. Farris emphasizes treating pricing as a product feature, why aligning product initiatives with revenue metrics is vital, and the importance of a centralized approach to balance customer needs across diverse market segments. He also reveals strategies to avoid overwhelming add-on choices, and his view on innovative AI pricing models.

In this episode of Unpack Pricing, Scott Woody, co-founder and CEO of Metronome, talks with Matan-Paul Shetrit, Director of Product at Writer, a full-stack generative AI platform for enterprises.They explore the evolving landscape of AI pricing, where rapid model advancements and enterprise adoption create pricing challenges. Matan (ex-Brex, Square, Stripe) shares why per-token pricing falls short for enterprises, how Writer is shifting to a hybrid model, and the importance of predictability for adoption. Matan also shares how AI transformation mirrors the cloud migration journey, how to navigate the tension between product and GTM teams, and why tackling high-value but "mundane" workflows is key to multi-year renewals.FULL TRANSCRIPT AVAILABLE HERE:metronome.com/podcast/unpack-pricing/how-writer-is-winning-enterprise-ai-deals-with-matan-paul-shetrit–FOLLOW:Scotthttps://x.com/l3amm https://www.linkedin.com/in/scott-woody-21677121/Matanhttps://www.linkedin.com/in/matan-paul-shetrit-aab12016/ –Check out: Writer: https://writer.com/  Metronome: https://metronome.com/ –TIMESTAMPS:(00:00) Intro(01:21) Matan's career journey from government to Writer(04:16) How product managers should view pricing(07:24) Pricing limitations in competitive markets(09:00) Balancing usage growth vs. commercialization(10:18) Moving from token-based to platform pricing(14:03) Why token-based pricing doesn't work for large organizations(16:55) How Writer's pricing model provides predictability(21:01) Using entitlements vs. feature gating(23:30) Managing product in rapidly changing AI landscape(26:01) Why Writer trains their own models for enterprise(28:21) Making enterprise IT champions rather than detractors(31:45) Platform value beyond foundational models(32:23) Real appetite for AI in large companies(34:37) Finding high-value mundane workflows(36:50)  Process for proving value to enterprise customers(39:00) The Importance of renewals vs. initial deals(41:01)  Why self-serve PLG doesn't work for Global 2000(44:05) Learning from established enterprises vs. disrupting(45:20) Wrap

In this discussion, Vina McAllister, Vice President of Product Management at Twilio with a rich history at Atlassian, asserts that billing should be a central part of the customer experience, not just finance. She emphasizes the necessity of understanding the entire business ecosystem for effective billing strategies. Vina shares insights on the evolution of customer self-service, the integration of billing with product management, and the critical attributes of successful billing product managers. She also touches on the potential of AI to enhance customer interactions.

In this episode of Unpack Pricing, Sam Lee, VP of Pricing Strategy and Product Operations at Hubspot and former Snowflake pricing leader shares his deep expertise in building and scaling pricing teams. He joins host Scott Woody to explore why pricing “is a sledgehammer, not a scalpel” in business strategy.Sam discusses why pricing is inherently challenging as a multidisciplinary domain, shares insights from Snowflake's successful consumption-based pricing strategy, and explores how AI is reshaping traditional pricing models. He also offers insights into the future of AI-driven business models, suggesting a shift where data exchange between companies and customers could fundamentally alter commercial relationships in software.–FULL TRANSCRIPT AVAILABLE HERE: https://metronome.com/podcast/unpack-pricing/inside-snowflakes-pricing-strategy-with-sam-lee–Follow:Scotthttps://x.com/l3amm https://www.linkedin.com/in/scott-woody-21677121/Samhttps://www.linkedin.com/in/samwise/--Check out:Value Monetization in the Age of AI, Sam Leehttps://medium.com/value-monetization-in-the-age-of-ai/value-monetization-in-the-age-of-ai-5cafce30332eMetronome:https://metronome.com/--RECOMMENDED PODCAST:Check out Modern Relationships, where Erik Torenberg interviews tech power couples and leading thinkers to explore how ambitious people actually make partnerships work. Founders Fund's Delian Asparouhov and researcher Nadia Asparouhova kick off the series with an unfiltered conversation about their relationship evolution.Apple: https://podcasts.apple.com/us/podcast/id1786227593Spotify: https://open.spotify.com/show/5hJzs0gDg6lRT6r10mdpVgYouTube: https://www.youtube.com/@ModernRelationshipsPod--Timestamps:(00:00) Intro(01:07) Why is pricing so hard?(01:14) Sam's three reasons why pricing is difficult(05:57) Top-down vs. bottom-up pricing initiatives(07:50) Essential skills for effective pricing leaders(10:02) Product expertise & pricing outcomes: The Snowflake Copilot example(11:49) The price-value-product experience feedback loop(14:19) Pricing managers as product managers for the monetization system(17:22) Criteria for choosing value metrics: Alignment with customer perception & cost scaling(19:50) Advantages & disadvantages of a pure usage philosophy(26:39) Operationalizing pricing changes in a usage model(28:03) Handling greenfield vs. brownfield customers(35:09) The rarity of successful outcome-based pricing(41:19) Advice for transitioning to usage pricing(43:05) Skillsets needed for usage-based pricing(46:20) The weird future of pricing(59:32) Wrap