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Yes. I focus on pricing software and I’m a bit baffled why frontier models are pushing tokens. It’s a race to the bottom, and the bottom is unlimited use for a
by garrickvanburen 2mo ago
Yes. I focus on pricing software and I’m a bit baffled why frontier models are pushing tokens.
It’s a race to the bottom, and the bottom is unlimited use for a flat monthly rate.
Granular pricing (tokens, minutes, etc) is pretty anti-customer generates less revenue than customer value-based subscriptions (why SaaS is such a good business model)
- Grombobulous 2mo agoBut presumably consumers aren’t where the majority of the spend will be. Consumers don’t generally get usage-based pricing because of the inconvenience and unpredictability, but B2B SaaS products utilize usage-based pricing all the time.
- garrickvanburen 2mo agoFew b2b buyers prefer it, for the same reason. For example, this is why reserved AWS instances exist.
- dakolli 2mo agoI've always been curious about who works on software pricing. Do you guys hire actuaries for this type of work?
- kortilla 2mo agoFor software that doesn’t make sense. Pricing software is a game of estimating both software value and the purchasing power for customers. Only the latter might have any available data and even then it won’t be sliced the right way for any in depth statistical analysis that an actuary would perform to underwrite risk. It’s much more traditionally a more salesperson like background where being in the target market or having strong connections to it dominates efficacy.
- deleted 2mo ago[deleted]
- esafak 2mo agoMicroeconomists. It's just a question of demand modeling. If you want to learn here is the bible: https://www.sup.org/books/business/pricing-and-revenue-optimization https://www.sup.org/books/business/pricing-and-revenue-optim...
- garrickvanburen 2mo agoIt’s about quantifying the business value of the software to a specific customer segment. More on my approach here: Https://forstarters.substack.com
- progval 2mo agoIsn't it because they have customers who will use as many tokens as they can? With a flat rate, they will run Gas Town continuously while paying as much as the occasional user.
- throwup238 2mo agoYeah it feels like a very different model. I don’t try to fill up Apple/Google cloud drives to 1TB because then I’d have to clean up when I need space. I don’t bother trying to maximize my Audible subscription because there’s only so much I can listen to in a day. Even with my other AI subs that have monthly credits that don’t carry over, I just don’t have the interest or time to burn the credits. But my Claude Max subscription? If I have any of my limit left the day of my reset, I’ll go and fire off research workflows with a bunch of parallel agents to explore whatever dumb ideas I had the past week. And there’s a 50:50 chance I’ll forget about it and never read the output.
- butlike 2mo agoAnd there's the rub. Firing off the task produces the dopamine hit, signaling you're doing something, but if you never read the output...are you really doing anything at all?
- throwup238 2mo agoI don’t know, I get dopamine hits from sharpening my handplanes and using my Veritas routers on some scrap, but I just can’t empathize with getting a dopamine hit from using a bot. Especially with how bad Opus 5 has been. I am however going to fire off a half assed prompt when the marginal cost is zero, even if I don’t use it (which is par for the course, I probably throw out two thirds of anything the AI writes anyway be it code or prose).
- focxle 2mo ago[flagged]
- oblio 2mo ago