In this episode, James Wood—monetization expert and head of product at M3ter—returns for a deep dive into pricing lessons from his time at Segment & 12 months leading product at M3ter, as well as insights & thoughts on emerging approaches for AI pricing.

🔹 Segment’s Pricing Evolution:James walks us through the transformation of Segment’s pricing—from a $10 flat fee that nearly derailed the business to the shift towards monthly tracked users (MTU) that helped scale to $100M+ ARR. Learn how Segment aligned pricing models with customer value, avoided self-serve cannibalization, and drove expansion revenue through smart packaging.

🔹 Complexity in Billing Models at M3ter:James reflects on the complexity of modern billing—how legacy pricing models create friction, but also why pricing intricacies can be necessary. He shares real-world examples of how M3ter handles unusual customer pricing requests and the delicate balance between flexibility and simplicity.

🔹 AI Pricing – The Next Frontier:AI is reshaping the pricing landscape. James breaks down how AI products are forcing businesses to rethink cost structures, whether seat-based, usage-based, or outcome-driven models will dominate, and why the AI market may head towards hybrid models that account for both compute cost and delivered value.

💡 Key Takeaways: • Align pricing with growth metrics that customers understand. • Don’t disincentivize product usage with restrictive pricing. • For AI, early models may focus on usage, but outcome-based pricing is on the horizon.

Chapters

• 00:00 Introduction and Overview of Segment's Pricing Journey

• 09:45 Transition to Meter and Insights on Pricing Models

• 19:50 Exploring AI's Impact on Pricing Strategies

📅 This is part two of a special two-episode series with James Wood.

👉 Listen to Part 1: "Usage-Based Billing is Here to Stay"