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CEO, CoFounder @Atlas
Bringing B2B Billing Infrastructure Into The Future | 3x Founder | ex @Pendoio | Father of Five | My Spirit Animal is an Arcanine | YNWA
"How in the hell does this work?" - me for the last 6 months.
There has been lots of conversation in the threads of Kyle Poyar, Pulkit Agrawal and Shar Dara regarding usage based pricing, its impending nature and how to operationalize it.
Specifically, how to financially account for it.
Chas Scarantino and I have been working on the best methods to financially plan and project in a usage based model - a challenge I've spoken to many CEOs about and one we're trying to solve for inside of Atlas.
We've started to solidify around a waterfall method in a model Chas recently built. Its complicated to build, but you're off an running once its fitted and you nail your vectors of assumption (customer segments, estimated usage, ramp to usage).
So, I'm making our usage based financial model open to anyone who wants to use it as a template. Give me a ✋ in the comments and I'll send it over via DM.
PS If you have a better way of doing this...TEACH ME. We're all trying to figure this out together 😅
____________
Hi, I'm Michael Hoy, CEO of Atlas and I sometimes post about #SaaS#SaaSBilling and #UsageBasedPricing. Other times I post stupid memes.
🔴 Exclusive interview alert!
The CFO managing editor spoke with SaaS financial guru Eliran Glazer last month about how monday.com had managed to keep growing since it's #IPO in 2021.
And we know the whole world has gone crazy about #AI this year, but their approach is definitely different.
Take a read of the full interview below 👇
https://lnkd.in/ekTMwn4a#CFOInsights#SaaS#FinancialLeadership
At the end of October, I sat down with Eliran Glazer from monday.com to chat about steering a high-growth SaaS company in today's market.
What stood out was his methodical approach to #growth: combining #data analytics with strategic customer-led development.
Since joining pre-#IPO, he's helped scale the company while maintaining its focus on genuine customer value.
Particularly interesting was monday.com's pragmatic take on #AI integration - focusing on practical automation that has saved users over 1.5 billion minutes. With plans for 30% growth in FY24 and a new service management product on the horizon, they're balancing ambition with disciplined execution.
👉 Read our full conversation here: https://lnkd.in/eRNNjk5F#CFOInsights#SaaS#FinancialLeadership
Yes ARR really means different things with UBP. The signal(s) that indicate “re-occurring” vs “experimental” or “episodic” revenue is there in usage pattern but it requires companies to go much deeper in understanding customers usage pattern, workloads, and use cases.
Snowflake in many ways benefited from the highly predictive nature of the data warehouse workload - a dashboard refreshes on a regular basis once it’s built, a data pipeline processed data in batch every day / hour, etc. Many AI use cases are not nearly as predictable (yet)… As companies adopt UBP for AI as part of their business model, understanding and identifying use cases that are “re-occurring” vs “episodic” will be critical to sustainable growth.
What that means is that you need to "instrument" your business to measure, track, and understand these usage pattern. This is the key to "steering" the ship - these usage metrics and accompanied insights will be used from financial forecasting to sales planning, and will even inform product strategy.
AI could kill ARR as we know it. And, in doing so, it could kill SaaS metrics as we know them ⤵
Annual recurring revenue (ARR) is the building block of SaaS metrics. And it's the basis of SaaS valuation multiples.
It's (usually) high margin, predictable and growing. Which means SaaS companies are (usually) on track to become highly profitable at scale.
AI throws this off.
What's not classic ARR:
- Charging per successful AI resolution (Intercom, Zendesk)
- Charging per credit used (Clay)
- Charging per task completed (11x)
- Charging per photo edited (Imagen)
- Charging per demand package generated by AI (EvenUp)
- Charging per conversation (Salesforce)
We're moving away from charging for *access* to software and to a model of charging for the *work delivered* by AI & software.
This might mean greater volatility. Variable margin profiles. Seasonal revenue. Project-based, non-recurring use cases 🤯
Welcome to the new "ARR": annual *re-occurring* revenue.
Some implications of this shift:
1️⃣ Spending much more time unpacking the components of revenue.
2️⃣ Moving away from ARR multiple valuations to looking at last 12 month revenue (or, even better, last 12 month margin $).
3️⃣ Looking much more closely at revenue concentration -- I suspect there will be a far wider variance between the smallest & largest accounts.
4️⃣ Measuring newer things like "time to ramp" and "share of wallet" as predictors of future success.
---
I unpacked this shift with CJ Gustafson in his Run the Numbers podcast (check the comments). And shoutout to Dave Kellogg for a great keynote on this topic 🙏
🎁 For more insights on SaaS growth & pricing, check out Growth Unhinged — my free weekly newsletter: https://lnkd.in/exTbjKaM#ai#saas#finance
🌟 Rethinking SaaS Pricing: What Lies Ahead? 🌟
Is AI the Key to Unlocking New SaaS Pricing Strategies? �*
While many have noticed the shift in SaaS pricing due to AI, let’s explore some unconventional angles that might surprise you.
1. Outcome-Driven Pricing: Beyond Simple Metrics
Rather than just charging based on output, companies could implement pricing tied to specific business outcomes. For example, a marketing SaaS might charge based on the increase in leads generated rather than just the number of campaigns run.
2. Tiered Value-Based Pricing: A Custom Fit
Imagine a model where pricing tiers are determined not just by features but by the unique value delivered to different segments of users. This could mean creating bespoke packages that cater to the specific needs and outcomes of various industries or business sizes.
3. Collaborative Pricing: Partnering with Customers
Consider a co-creation approach where customers contribute to defining their pricing model based on their usage patterns and outcomes they deem valuable. This could foster deeper customer loyalty and engagement.
4. Subscription-Free Models: Pay-as-You-Go
Break away from subscriptions entirely. Introduce a pay-as-you-go model where users only pay when they utilize the service. This could be particularly appealing for seasonal businesses or those with fluctuating needs.
5. Integration-Based Pricing: Charging for Connectivity
As integrations become pivotal in SaaS ecosystems, why not charge based on the number of integrations utilized? This could reflect the increased value users receive from interconnected services.
6. Community-Driven Discounts: Rewarding Engagement
Implement a pricing model that rewards users who actively engage with the community or contribute to user forums. Discounts could be offered for participation, creating a vibrant user community while reducing churn.
💬 What are your thoughts? Could these ideas help reshape the future of SaaS pricing? Let’s discuss! 👇
#SaaS#AI#InnovativePricing#BusinessStrategy#CustomerEngagement
AI could kill ARR as we know it. And, in doing so, it could kill SaaS metrics as we know them ⤵
Annual recurring revenue (ARR) is the building block of SaaS metrics. And it's the basis of SaaS valuation multiples.
It's (usually) high margin, predictable and growing. Which means SaaS companies are (usually) on track to become highly profitable at scale.
AI throws this off.
What's not classic ARR:
- Charging per successful AI resolution (Intercom, Zendesk)
- Charging per credit used (Clay)
- Charging per task completed (11x)
- Charging per photo edited (Imagen)
- Charging per demand package generated by AI (EvenUp)
- Charging per conversation (Salesforce)
We're moving away from charging for *access* to software and to a model of charging for the *work delivered* by AI & software.
This might mean greater volatility. Variable margin profiles. Seasonal revenue. Project-based, non-recurring use cases 🤯
Welcome to the new "ARR": annual *re-occurring* revenue.
Some implications of this shift:
1️⃣ Spending much more time unpacking the components of revenue.
2️⃣ Moving away from ARR multiple valuations to looking at last 12 month revenue (or, even better, last 12 month margin $).
3️⃣ Looking much more closely at revenue concentration -- I suspect there will be a far wider variance between the smallest & largest accounts.
4️⃣ Measuring newer things like "time to ramp" and "share of wallet" as predictors of future success.
---
I unpacked this shift with CJ Gustafson in his Run the Numbers podcast (check the comments). And shoutout to Dave Kellogg for a great keynote on this topic 🙏
🎁 For more insights on SaaS growth & pricing, check out Growth Unhinged — my free weekly newsletter: https://lnkd.in/exTbjKaM#ai#saas#finance
🔄 Resharing Kyle’s post here because it hits on something huge: how AI is upending traditional ARR and SaaS metrics. This got me thinking about how similar shifts are happening with Product-as-a-Service (PaaS) in the physical products world.
For manufacturers, it’s no longer just about selling access to equipment; it’s about delivering outcomes, like uptime, performance, or cost savings. We’re talking pay-per-use models for machinery or pay-per-outcome models that drive real value for customers.
This means rethinking metrics and customer relationships. PaaS is pushing manufacturers to go beyond one-time sales and build long-term partnerships where revenue is tied to how well we’re helping customers succeed.
Thanks, Kyle, for starting such a relevant conversation—ARR is definitely evolving, and I’m excited to see where it goes!
#PaaS#Manufacturing#ARR#IndustrialAutomation#RecurringRevenue
AI could kill ARR as we know it. And, in doing so, it could kill SaaS metrics as we know them ⤵
Annual recurring revenue (ARR) is the building block of SaaS metrics. And it's the basis of SaaS valuation multiples.
It's (usually) high margin, predictable and growing. Which means SaaS companies are (usually) on track to become highly profitable at scale.
AI throws this off.
What's not classic ARR:
- Charging per successful AI resolution (Intercom, Zendesk)
- Charging per credit used (Clay)
- Charging per task completed (11x)
- Charging per photo edited (Imagen)
- Charging per demand package generated by AI (EvenUp)
- Charging per conversation (Salesforce)
We're moving away from charging for *access* to software and to a model of charging for the *work delivered* by AI & software.
This might mean greater volatility. Variable margin profiles. Seasonal revenue. Project-based, non-recurring use cases 🤯
Welcome to the new "ARR": annual *re-occurring* revenue.
Some implications of this shift:
1️⃣ Spending much more time unpacking the components of revenue.
2️⃣ Moving away from ARR multiple valuations to looking at last 12 month revenue (or, even better, last 12 month margin $).
3️⃣ Looking much more closely at revenue concentration -- I suspect there will be a far wider variance between the smallest & largest accounts.
4️⃣ Measuring newer things like "time to ramp" and "share of wallet" as predictors of future success.
---
I unpacked this shift with CJ Gustafson in his Run the Numbers podcast (check the comments). And shoutout to Dave Kellogg for a great keynote on this topic 🙏
🎁 For more insights on SaaS growth & pricing, check out Growth Unhinged — my free weekly newsletter: https://lnkd.in/exTbjKaM#ai#saas#finance
🚨 Quick post to tell you about a SaaS data product that I'm excited about - Luzmo.
Every B2B company wants to put data in front of their customers. Most teams have already got their hands full with their core product, and building something compelling from scratch is going to be 6-12 months of engineering effort.
That's where Luzmo comes in. They've built something properly clever 🧠
Want to embed interactive dashboards in your product? ✅
Need role-based access control that actually works? ✅
Looking to add AI-powered analytics? ✅
With Luzmo A company with almost no engineering resource can ship their first data product in weeks, not months. You can have customers exploring their data with AI assistance, right inside your product, in under a month.
No massive enterprise contracts. No maintenance headaches. Just a platform that does what it says on the tin.
If you're been sitting on a goldmine of customer data but haven't had the resources to do anything with it - drop me a message.
Would love to show you what's possible 🚀
Day 4: First $500 revenue milestone hit. Here's the exact playbook:
Morning results:
- 17 trials activated
- 5 paid conversions
- 2 annual plans sold
Key growth drivers:
Cold outreach converted to live demos
Demo to paid: 72% success
Referrals already rolling
AI tools earned their keep:
$147 spent → $500 earned
2.4 hours saved per user
91% positive feedback
Failed experiments:
Basic tier too cheap
Manual demos too slow
Generic marketing dead
Quick wins:
Automated personalization
Self-serve onboarding
Social proof automation
Pipeline explosion:
3 enterprise calls tomorrow
7 integration requests
$4.7k in verbal commits
Reality check: Markets reward speed. Built → Launched → Sold in 96 hours.
Tomorrow: First hire. AI customer support agent.
Want Day 5's scaling blueprint? Drop 💰
Awarded revenue intelligence tool 180ops in use at Accountor Group.
180ops has been awarded with the Corporate LiveWire Innovation & Excellence award for THE MOST INNOVATIVE NEW BUSINESS SOFTWARE 2024.
Here’s how our customer Petri Karjalainen from Accountor Finago describes his experience with our tool:
“Leading businesses and decision-making with reliable, real-time data is at the core of what we at Accountor Finago do for our customers. This is why having 180ops in use for our revenue operations feels 100% natural. Thanks to the outside-in, evidence-based and real-time perspective it provides, we are able to make better, proactive decisions and drive our growth with added clarity. I cannot wait to see the full positive impact of 180ops on our business when we roll it out fully to our organization.”
– Petri Karjalainen, SVP, RevOps, Strategy, M&A
180ops is a B2B #RevenueIntelligence tool harnessing the power of AI and predictive analytics to streamline budgets, optimise resources, and drive sales – removing the barriers to sustainable growth.
Want to see what the 180ops benefit for your B2B company could be?
Book a demo and a business case calculation with our co-founder, CPO, Toni Keskinen.
Link in the first comment.
#saas#180ops#revenueoperations#revops#corporatelivewire#awards#innovation#software#enterprise#ai#data#analytics#accountor#customer#reference
Those AI productivity tools aren't cheap
Here's a prompt to help you find free customer success tools
Prompt
"Create a detailed guide on free AI productivity tools specifically designed for SaaS customer success managers, focusing on how these tools can automate a broad range of routine tasks and help free up 10 hours per week. The guide should cover various categories of AI tools and include specific tool recommendations with links."
I solved my own problems...
and ChatDash was born!
Excited to share my recent chat with Lowe on how a personal challenge led me to build ChatDash—a game-changing, AI-powered platform for chatbot agencies. We discussed the journey from concept to launch, with insights on AI, automation, and the path to creating impactful SaaS solutions.
Catch the full video for a behind-the-scenes look into building a solution that works, scales, and meets real needs.
👉 Watch the full video here: https://lnkd.in/em4EPwsE
This task used to be done manually by an employee. Now Claygent does it for us.
Clay just leveled up with their Claygent Neon update, and it's changing the way we do data enrichment at ColdIQ.
The new equation you should remember is this one → 1 Clay expert with Claygent = 10 BDRs doing research manually.
The Clay team has also been cooking some new things around content.
If my thick French accent was less noticeable in this voice-over it’s actually because the Clay team created the entire video for me.
I just had to do a quick voice note, pick the background, add some music, and the video was automatically created.
It's impressive to see how seriously the Clay team (shoutout to Peter Kang and Thomas Colitsas) takes their community.
They are already known for having created the community-led growth playbook, but they keep adding to it.
Automated content creation for your creators is just a new innovation that many companies will replicate in the coming months.
Building great tech + growing a great community.
Literally the best way to grow a Saas in 2024.
PS: Want to see how Claygent Neon can transform your outbound? Drop me a DM, our team has been creating amazing Clay tables around it.