[julesvr]

Congrats on the launch!

On your pricing model, as it's usage based, don't you incentivize your customers to use your product as little as possible? Wouldn't it be better to have limited tiers with fixed annual/monthly recurring rates? Also, do you sell to enterprise? I assume these would like this setup even more as the rates are predefined and they have a budget they have to deal with.

I'm currently developing my own pricing model and these are some issues I'm struggling with, so curious what you think.

[twosdai]

Im currently building a billing platform, also a yc company, I've talked with a lot of different people about price strategies. If you want to talk more about in detail feel free to email me. (In my profile)

Not really a sales thing. (Im the cto, awful at sales) I just enjoy talking about pricing models with people.

[matt_lee]

Not a pricing expert by any means, but here were some of the considerations we thought of when we made that decision:

1. There's plenty of usage based infrastructure/dev tools (ie. AWS, databricks), so I don't think we incentivize minimal usage.

2. The value we're providing feels directly tied to how much testing we're running, so when we tried to construct tiers they didn't feel helpful.

3. In our experience, enterprises have been fine with usage based pricing. They're already paying for human QA / labelling on usage based terms (even if it's part of a larger fixed contract), so our pricing isn't a deviation for them.

Open to thoughts if anyone has them!

[twosdai]

Some quick thoughts,

Usage based pricing with some sort of free tier ideally is typically is _best_ for individual developers and smaller businesses who are price sensitive but want to get off the ground quickly. Larger businesses can benefit from a usage based model but typically enterprises will want a more guaranteed price and stability quarter to quarter for planning purposes. This doesn't mean necessarily that usage based pricing doesn't work for enterprise businesses however it does mean that they typically are keen on having alerting and limits setup so that they don't accidentally go massively over budget.

One common strategy to continue with usage based pricing for enterprises but have more stability is to have them buy the usage "upfront". As an example, to use this product you may charge them "tokens" which correlate to dollars, and they can buy 1000 tokens upfront which get burned down over their time using the platform.

Another reason why enterprise plans are not typically usage based, or at least why its less common, is that many enterprises want to self host the product in their own systems in order to meet their internal security and compliance standards for their data. If that ends up being the case, self hosted products typically are not usage based because the act of sending consistent usage data back out of the enterprise's VPC adds a lot of additional complexity for the product and both business parties. Typically an annual license based structure is the model most businesses go with for self hosted.

Just to disclose a bit, I help companies do billing and figure out their best pricing strategy. Also a YC company. Congrats on the launch, the demo is technically impressive, and the value prop to me is really clear.

If you want to chat at all about it, happy to just talk for a few minutes. My email is in my profile.