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pricing strategy

Judgments in this source concerning pricing strategy. Explore 3 viewpoints with evidence from 1 source.

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Avoid importing model-layer token pricing to the application layer

Pricing application-layer work in tokens imports the model provider’s cost structure into the customer relationship and anchors product value to a unit whose cost keeps falling. Carrying model-layer pricing logic into the application layer is often a mistake.

Supporting evidence

You are not a model. Don’t price per token. | Andreessen Horowitz

Original excerpt

When an application prices that work in tokens, it imports the model provider’s cost structure into the relationship with the customer and anchors the product’s value to a unit whose cost keeps falling. Based on our work, it’s often a mistake to carry the model layer’s pricing logic into the application layer.

Price at the highest measurable, attributable, defensible value layer

Companies should price at the highest layer of value they can reliably measure, attribute, and defend—not at the infrastructure or token level.

Supporting evidence

You are not a model. Don’t price per token. | Andreessen Horowitz

Original excerpt

Instead, we believe companies should price at the highest layer of value that they can reliably measure, attribute, and defend.

Package variable work in credits; move toward outcomes customers can recognize and trust

Turn variable work into units customers can understand. Use credits to package those units when flexibility matters. Move toward outcomes as soon as customers can recognize and trust them.

Supporting evidence

You are not a model. Don’t price per token. | Andreessen Horowitz

Original excerpt

The better path is to price at the highest layer of value you can reliably measure, attribute, and defend. Translate variable work into understandable units. Use credits to package those units when flexibility matters. Move toward outcomes as soon as customers can recognize and trust them.

These findings reflect the available sources, not an exhaustive or current view.

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