Amy Konary on this episode
Amy Konary coined the term "SaaS" when she was an industry analyst at IDC, sizing the first market at $40 million and watching it grow into a multi-hundred-billion-dollar industry. She spent nearly two decades as a top analyst advising the companies that built the sector, and now serves as SVP of Marketing at Zuora and founder of the Subscribed Institute. Her career arc gives her a unique vantage point on the business model's evolution from transformative to extractive.
The core thesis: The SaaS pricing model is hitting a breaking point because the same dynamics that killed perpetual licensing are now eating SaaS from the inside. Customers are facing 6x renewal increases, AI features with unclear value propositions, and the growing option to build solutions themselves. Konary describes this as the moment when "the vein of gold is tapped out," forcing a reckoning with the extractive playbook that defined the last two decades.
The reframe here is critical: SaaS was originally built on symbiosis, where both provider and customer created value together. If a customer saw no value, they wouldn't pay to renew. That alignment broke when vendors realized they could raise prices independently of demonstrated value. Now, the market is correcting. Companies that move fast without customer conversation are burning resources on AI features nobody's adopting. Those that listen, communicate trust architecture clearly, and align price increases to real value creation are building relationships that last.
The episode explores hybrid monetization models (platform fees plus usage or outcomes), the operational complexity of metering and rating systems, the five-stage subscription maturity model Konary has used with hundreds of companies, and why your competitive moat matters more right now than your AI roadmap.
What we cover in this episode
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1:19
How Konary Coined SaaS As an IDC analyst assigned to study cloud software companies, Konary created the SaaS category, named it, and sized the first market at $40 million.
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8:15
Why Extractive Pricing Is Breaking Vendors raising prices 6x without showing value face customer resistance, build-it-yourself alternatives, and a market where the perpetual license playbook repeats itself.
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10:39
Shifting to Hybrid Models Platform fees combined with usage, outcomes, or performance fees create predictability for customers while allowing providers to capture upside from innovation.
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12:49
Trust Architecture and Relationships Communication, data integrity clarity, compliance consent, economic clarity, and pricing dignity are the pillars of sustainable recurring revenue relationships.
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19:02
Why AI Adoption Is Stalling Customers in mission-critical roles and public enterprises are cautious; adoption rates don't justify price hikes; policies and risk concerns slow enterprise rollout.
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30:49
AI Features That Actually Work Reducing time-to-value, agent creation, and copilot interfaces that make software talk-friendly drive real adoption; implementation acceleration and natural language interfaces matter most.
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39:13
Pricing Ownership and Iteration Finance teams now own pricing models in fast-iterating companies; avoid bloated product catalogs; hybrid flexibility without new SKUs requires metering and rating systems.
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53:00
Five-Stage Subscription Maturity Model Launch, retention focus, expansion, optimization, and renewal defense stages each demand different strategies; companies get stuck when they skip the fundamentals of each phase.
The lines worth sharing
The dynamics that caused the rise of the SaaS industry to begin with are absolutely alive and well today. That methodology of just jacking prices up and up without showing value, that is at its breaking point.
Amy Konary · 9:37
When you are selling a recurring revenue product, you're selling a relationship at the end of the day. That's why you have a team called Customer Success.
Amy Konary · 12:39
Somehow we've kind of moved away from that because everybody's like we got to go really fast. And so they're building these things without that necessary communication channel.
Amy Konary · 13:45
Putting yourself in your customer's shoes is the number one thing that anyone can do in these times. The easiest way is having a conversation with them.
Amy Konary · 50:59
Common questions from this episode
Who coined the term SaaS and what was the original market size?
Amy Konary coined SaaS as an IDC analyst. She named the category, sized the first worldwide market at $40 million, and forecasted growth over five years. Early companies like Salesforce charged $5.99 per user per month.
Why is the SaaS extractive pricing model breaking now?
Customers face 6x renewal increases without corresponding value, AI features show low adoption, and alternatives like build-it-yourself solutions are more viable. The vein of growth is tapped out; vendors can't raise prices independently of demonstrated value.
What is a hybrid pricing model and how does it work?
Hybrid combines a predictable platform fee (e.g., per seat) with variable usage, outcome, or performance fees. Research shows the sweet spot is 1-25 percent of revenue from usage; more than that creates customer churn and unpredictability for forecasting.
What are the trust pillars customers need before adopting AI in enterprise software?
Data integrity, compliance consent, economic clarity, pricing dignity, and visibility into usage. Customers need assurance AI won't train competitor models, that costs are predictable, and that they retain control.
Which AI features are actually driving customer adoption?
Reducing implementation time, enabling agent creation for custom workflows, and copilot-style interfaces that let users talk to software naturally are seeing adoption. Features that increase efficiency but lack clear ROI are being rejected or opted out of.
Who should own pricing decisions and how should pricing iterate?
Finance teams typically own pricing models in fast-moving companies, taking input from product, sales, and revenue teams. Avoid bloated product catalogs by using metering and rating systems instead of creating new SKUs for each pricing variant.
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Amy Konary, who coined SaaS, explains why the extractive pricing model is breaking and how symbiotic business models create lasting recurring revenue.
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extractive vs symbiotic business models
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Read the full transcript · 72 KB · Amy Konary
AMY0:00the dynamics that caused the rise of the SAS industry to begin with
AMY0:04are absolutely alive and well today.
AMY0:06so that methodology of just jacking prices up and up and up without showing value, that goes up and up and up
AMY0:13that is at its breaking point.
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RACHAEL0:49Welcome back to Go to Market Science. I'm your host, Rachel Burkhardt. And with me today is Amy Connery, the SVP of marketing at Zora, which is a leading subscription management platform as well as the founder and chair of the Subscriber Institute. So whereas Think Tank, today, we're going to be talking about building recurring revenue that actually lasts and the shift from extractive to symbiotic business models and go to market.
RACHAEL1:12Thank you so much, Amy, for joining us.
AMY1:15Absolutely. I'm really excited to be here. Look forward to it.
RACHAEL1:18Yeah. So, Amy, you've had a really unique career arc. You spent nearly two decades at one of the top industry analysts as one of the top industry analysts at IDC. They made the jump to Zora. We've led marketing customer success strategy. And you built the subscribed Institute from the ground up. Would you be able to give us a quick version of that journey?
RACHAEL1:36And what's driven you through it?
AMY1:38Yeah, absolutely. So I've always been interested in technology, and my first job in the software industry was before the SAS industry. So it was a while ago. And one of the things that struck me at that time was the lack of customer centricity in, in the software industry. Years ago, the the old model perpetual software license model, you sold a whole bunch of software.
AMY2:02It behooved you to sell as much as you possibly could up front. The software was shipped to the customer's physical media. The customer hired consultants, systems integrators to install it. You somewhat wiped your hands of that customer, though typically they were contractually obligated to pay you maintenance forever as long as they used the software and it was really up to the customer to get value out of it.
AMY2:25So the vendor technology provider recognized all of the revenue upfront. Maintenance was contractually obligated. So it's just like guaranteed recurring revenue stream, which was contractually set at the percentage of that license fee. And it was quite a great business model for the technology industry. There's really no incentive from a economic perspective for that model to change, but it was really terrible for customers.
AMY2:48During the time of my first software company, I saw companies go out of business, not our customers necessarily, but other companies go out of business trying to install ERP systems. Companies going bankrupt. Lawsuits. It was really quite disillusioning. And so I became an industry analyst, really to find the customer and all of this, I thought that there's a real benefit to technology, but the way that it was sold, really the go to market at that time was completely broken.
AMY3:17And when I became an industry analyst, this was before SaaS and it was just starting to to develop. And because I was the new analyst, they kind of gave me the assignment to go figure out what these people were doing in strip malls and apartments, where they were putting software in the cloud, which was called a variety of things.
AMY3:36Then we hadn't hadn't hinged on cloud yet, and providing access via a recurring payment. And it really shifted the risk dynamics and also created a relationship where both the provider of the technology and the customer were creating value together, because if the customer wasn't seeing value, they weren't going to adopt more. They weren't going to continue to pay.
AMY3:58And to me, that felt like a lot better model. And so I was the industry analyst, created the SAS category, named it, defined it, and for many years, any software company that was building a SaaS business throughout the very early years, up until 2017 or so, was likely a customer of mine, and where I had to do a lot of the work and advisory work was on the go to market itself because I, as I said, the previous economics go to market, really favored the vendor and most companies really didn't want to change that.
AMY4:30So you had to go through a really difficult shift. People called it swallowing the fish. If you were a company like Oracle or SAP, anyone who had been around, before that shift and some companies didn't make it. And of course, we had a whole host of companies like Salesforce in the company that I worked for, Zora, that, that were founded during that time to try to serve that that new and meet that new market need.
AMY4:55So I found that incredibly fascinating. When it was time to go back to the operator side, Zora was a natural fit for me because I knew how difficult and, and sort of ongoing the challenge of really nailing the go to market around recurring revenues was and it's really because that shift in dynamic from extractive, you know, I'm going to extract as much money as I possibly can up front from you to more of a symbiotic relationship.
AMY5:24Or at least that was the idea of SAS in the very beginning. And I think we've drifted away from that a bit over the years. I think the SAS industry as it exists today looks pretty similar to how the industry software industry looked 20 years or so ago. When I first started paying attention. And so I'm really looking forward to this next phase.
AMY5:44Certainly feels like we're entering this next phase of technology being an opportunity for us to to really do a reset and to, allow us to create relationships between customers and providers that can truly be valuable. For both sides. And I think that's really the only way forward. So I'm excited about helping to that.
RACHAEL6:05That's awesome. And did you correct me if I'm wrong? Did you coined the term SAS or are you one of the first people.
AMY6:11I did because there was no market, at the time, and because my responsibility was to size and forecast the market, I had to give it a name. And, what was interesting at the time is I was an analyst in our software pal, and there was an analyst in the services that wanted to cover it as well.
AMY6:28And we kind of debated whether it was software as a service or services as software. And whoever decided which word went first would end up getting to cover it. And I really wanted to cover it. So I remember what the customer buying was. Buying was ones and zeros. They were buying software functionality first and foremost. And so that's why I called software as a service.
AMY6:50But it almost became services software. But it did not. And so that very first market sizing, it was a complete finger in the air, I guess, because nobody would tell me how much money they were making. But I guessed that it was about a $40 million worldwide market size. I can remember doing that very well, putting it in the Excel spreadsheet and forecasting that out for five years.
AMY7:13And of course, now the market itself is way more than $40 million worldwide. But back in the day, with that first sizing, you know, these were all private companies. The subscriptions were very inexpensive. Salesforce, was five, 99, $5.99 per user per month back then. So getting to 40 million when you were really just pricing to get adoption, which is what these companies were doing early in the day, was really tough.
AMY7:39And of course, now, we know that, that that's not the case anymore size in the pricing terms.
RACHAEL7:45So you've, you've we've really seen it all from the very beginning. That's amazing. So what, you know, through all of that, what do you think is, driving this push, this evolution from extraction to, symbiotic business models?
AMY8:01Yeah. So I think about them and to think about it very practically. And then I'm going to think about it very quickly. So very practical perspective when I'm talking to a CRO. You think I, I always I think about the metaphor of, of finding a vein of gold. Right. And, and you tap into a certain vein and there's a point in time where that vein is no longer available to you.
AMY8:22And that was the perpetual license model. And that's why the, the, the subscription model as it became, in the last 20 years or so, was a source of growth for companies because the number of companies that wanted to pay for perpetual license install software on prem, got smaller and smaller over the years. And the companies that wanted to access functionality over the cloud, that got better and better over time.
AMY8:49That made a lot more sense to companies. So there was a real economic reason for companies to start to shift to selling, just for subscriptions and SAS. Now, what we're seeing, of course, is that opportunity becoming tapped up and tapped out. And I'm seeing it in the conversations that I have with, the buyers every day, the CFOs, you know, the CEOs who are saying, gosh, we got our renewal for, you know, SAS application and it is six x what we were paying before.
AMY9:19And you can't do that like that. You, you, you get to a point where the customer says, I have alternatives. I could try to build it myself. I could go with lower cost provider for good enough functionality. I mean,
AMY9:30the dynamics that caused the rise of the SAS industry to begin with are absolutely alive and well today.
AMY9:37Even more so with, the the bar for what it takes to build, an application that you'd use inside an enterprise or small business has gotten much lower.
AMY9:46And
AMY9:46so that methodology of just jacking prices up and up and up without showing value, that goes up and up and up that that is at its breaking
AMY9:56point. Now the argument is, well, you know, because of AI, we're we're putting new features in our product, but we don't see customers yet feeling like they're seeing enough value out of those features.
AMY10:09And certainly I know that from, again, from the people that I'm talking with, the adoption of those features is in early days. And so it's really difficult to know what the value might be. It's very hard to to price for that. And of course, we know the costs are unpredictable as well. So shifting to a model, you know, you hear it all of the time, shifting to a model that's a bit more of a hybrid model where you have some sort of a platform fee in addition to a usage or an outcome or a performance fee, is what we hear companies talking about, by the way, usage and outcome has always been associated with
AMY10:44recurring revenue models, including SaaS. Somewhere along the way, SaaS got equated with Percy pricing, as if that's the only way to monetize it. It isn't. But I'm not going to
AMY10:56die on that hill. If you want to say, look, SaaS was perceived, now we're moving into usage and outcomes and that equals AI. Fine. I don't really care what you call it, but
AMY11:06the reality is customers are going to want a balance of predictability and a balance of, some sort of, alignment between the price that I'm paying and the value that I'm getting out of the software.
AMY11:19And that's where the extractive versus symbiosis balance is happening, where
AMY11:26providers cannot, simply put features out and assume customers are going to get value, they're going to adopt them just because they're there, and they're going to be happy to pay six x for your tool because of them, which was a assumption that companies were making 6 to 12 months ago.
AMY11:40I think they're backpedaling on that a bit more. And they are, these companies I'm talking to moving to more of a co-creation of value, approach, which I think is much more sustainable from a long term perspective.
RACHAEL11:55Okay. So companies that kind of find themselves in that model right now and maybe, you know, zeros or revenue listeners listening to this who are realizing that they might actually be in that kind of extractive model, what should they be looking for and how should they be thinking, you know, going into the future ways to pull out of that and be more symbiotic, where kind of the first steps.
AMY12:20Yeah, I think, I mean, and this is where I'm going to get woowoo. So that was more of the economic side. Here's the Woowoo side. When when you are selling a recurring revenue product, you're selling, at the end of the day, a relationship. That's why you probably have a team called Customer Success. We didn't have customer success before all of this.
AMY12:39There was support and had documentation. You still have those things, but success has always really been focused on helping the customer get to value. And if you think about any relationship that you might have in your personal or professional life, there are a couple of fundamentals that make for a good relationship. Number one is communication. And and when it talks to, you know, what should cross our CEOs do conversations with your customers are so, so important.
AMY13:11What they need, how they feel about AI, how they feel about adopting AI within that. And again, not rock and science woo woo. But somehow we've kind of moved away from that because everybody's like, we got to go really fast. And so they're building these things without that necessary communication channel. Who are your top customers? Bring them into a cab, have a conversation about what you're thinking, have them tell you what they're thinking, talk about what it will take for them to trust what you're bringing to market, because there's a whole trust architecture that comes into play when you're talking about AI.
AMY13:45And just having those conversations is so, so important. And I'm finding companies are wasting more money by trying to go fast and building things without having clear and open communications with their customers, because they're putting them out there. And the customer customers are saying, don't turn them on, turn them off. I want I want to be opted out of this because I have a policy and I can't adopt it, or I'm not sure how, whether or not what I'm doing is going to train a competitor, a model for a competitor, or you haven't made it clear to me how the cost of this might change over time.
AMY14:17So making sure you're having that clear communication, and even if it's going to take you a little bit of time, is going to save you time and money down the road. So that's the first thing. The second thing is I alluded to trust. And trust is so key when it comes to any relationship. And you know, we talked about trust in the early days of SaaS.
AMY14:37I think people don't realize or remember that as much because it's sort of a foregone conclusion. But there was a time when people really had a hard time getting their heads wrapped around the fact that my software and data is going to sit outside of my company, and companies like Salesforce and others had to do a lot of work to prove why that was more trustworthy, more secure, and just a better reliability and availability model relative to things that you could control within your own business, and that the benefits of being able to access software that was sitting in a cloud environment outweighed any potential risks of the fact that your customer data and personally
AMY15:21identifiable information was going to not be sitting within your own company walls. That was a huge hurdle. Somehow we we don't have as many of those conversations, before, and now as we did before. And if you think back to when it comes to AI, what are some of the trust pillars that you're going to need to be able to to share with your customers, to help them feel really comfortable about adopting this new Technol technology, which is, of course, a precursor to value the integrity of the intelligence.
AMY15:53You know, how do you know that what you are as a customer interacting with is not going to be filled with, with copyrighted information? It's going to be accurate. It's not going to be misleading. Those are things that people are worried about. And that's one of the reasons why, you see companies saying, look, I'm not going to adopt this at this time, which we're still figuring it out.
AMY16:14Clarity on data contribution. Am I training a model by using it that my customers are going to get my competitors, rather will be getting benefit out of? And how do I opt out of that? What kind of compliance consent do I need to give and can I revoke it at any time? Economic clarity how is this pricing going to evolve anytime and over time?
AMY16:34And and is there pricing dignity, meaning, you know, am I going to be have some control over how this unfolds over time? Or if there's a usage model, how do I see user visibility into what that usage looks like? Do I have the opportunity to pause and resume? And from a provider perspective, you know, communication and trust are so, so important to any relationship.
AMY16:56And it's the only way to create a sustainable relationship that's not extractive. And that actually can get you the value that you're hoping to see by all of this incredible innovation. So anyway, that was a lot, of soapbox and things, but these are a lot of the conversations that I'm having with companies is they're kind of tripping over themselves to try to figure out, how do I go fast?
AMY17:16How do I build a competitive mode, how do I make it clear that I have a strategy? And and you could talk about all of those things and have the strategy, but if you are not talking to your customers and you're just doing messaging out there in the world without having those meaningful conversations, you're going to end up having to pull back and retrench more times, and you're going to be able to move forward.
RACHAEL17:36Yeah, I always hear the term move fast and break stuff like people want to like, move quickly, ship and then see what works and what doesn't and, and iterate based off of that. But you're saying like this can just quickly lead companies down like this world, the drain.
AMY17:51Yeah. I mean, it certainly depends on on what you are, but, Zora is a financial system of record. If we break it for our customers, people go to jail. Like, oh, and there are other systems, too. Like, if there's ship breaks, planes crash like this. Yeah. That's important. You do. You know, you have different levels of, ability to do some of that and I think different degrees of it.
AMY18:14I mean, I love the idea of rolling up sleeves and experimenting, but you've got to create you've got to do that within, within a safe context. And you can't assume sort of what I'm talking about. You can't assume what you're building is automatically going to translate into value for a customer just because you think it's a super cool idea.
AMY18:32And if you do that, independent of having those customer conversations, you have to talk ad nauseum. You can be building in parallel, but you really ought to have some, really meaningful check points with customers. Otherwise, you could have a surprise. And I'm seeing that play out today, is costing a lot of enterprise software companies a lot of money because they don't have people adopting the AI features that they've got out there.
AMY18:55So they have incredibly high paid resources out in the field trying to convince customers to use AI tools that they don't want to use because they don't understand why they need them. So that is a problem I'm seeing in a lot of places today.
RACHAEL19:08A lot of trying to shove a square peg in a round hole.
AMY19:11It's like, yeah, and use it. It may, it may be that's the process. Maybe that's the process to getting to this is what we actually want to see. And some companies have the capacity to throw money at the problem. And I'm not worried about these particular companies. You know, going belly up anytime soon. But if you're a small to midsize company, I'm saying anywhere, you know, under 30 million RR, you know, you don't have too many At-Bats at this thing.
AMY19:38And certainly an epic failure when you, you know, if you have financial software or software with an operations that cost customers real, tangible money or puts them in real risk if it breaks or hallucinates, like you just have to be careful as well.
RACHAEL19:56So what's the growth play that you would suggest as an alternative to, you know, just trying to get on the bandwagon of creating all these AI genetic features and, and hoping that people like them enough to renew or expand into bigger tiered, subscriptions.
AMY20:13Yeah. I mean, I think experimentation is and can be a really great way of doing this co-creation of features with your customers. So I'm seeing, companies do really fun things where they're bringing customers on site, working with engineers and just kind of getting in their systems and what it would be like. What would it be like if, if you could do things this way or that way?
RACHAEL20:34Oh,
AMY20:34know, think of hackathons where you usually get teams of engineers together. Can you bring customers on site and kind of work in parallel with them for a day or, you know, I think that conversation, how do you make that conversation happen and then go off and do the sprint is something that we're seeing that's working really well.
AMY20:52Having champions out there in the industry, people who are excited about what you're doing and who will evangelize that for you within your customer base. Also something that we're seeing, happening and being really exciting. I think, again, I operate in the field of enterprise software, and you have different degrees of, levels of wanting to adopt new innovation.
AMY21:15I mean, some of the companies that I'm working with that are in the industrial space or in the agricultural space, and their customers are still a bit further behind, maybe someone who's in a martech or a sales tech space. So there's no one size fits all approach. But I would say, yeah, I mean, you can build things really quickly.
AMY21:34You can test things really quickly. You can build and do context mapping really quickly. If you have an enterprise system that's a vertical system, or one that has a lot of data in a space that doesn't exist in a lot of different areas, you can do a lot of predictive, and you make your existing apps just so much better for customers.
AMY21:55You can increase and or rather decrease implementation times. So I would say where you can allow your, a thousand flowers bloom to a degree at some point in time, you've got to pull back and say, okay, well, which one of these are really going to create value for our customers? Maybe it's time to value because it'll shorten implementation times.
AMY22:19Maybe it allows them to interact with their data in new ways. Maybe it allows them to be more efficient. Maybe it allows them to bring together data sets that have never been brought together. Before. I'm incredibly excited about what the systems can do, but what I what gives me pause and what worries me is that it is not clear yet how customers are willing to pay for all of these great things that the systems can do.
AMY22:45Are they willing to pay more for the software? That's totally not clear. In fact, when we, you know, have have have done survey work, we find a very low percentage of customers saying, I'm just going to write a bigger check, for this software, if it has AI features. We also know from the vendor side, I was looking at a study from a company called iconic recently, where 37% of the software companies that they were talking with were planning on changing their pricing within the next year because of AI, and another 40% were totally unsure.
AMY23:18So like 70% of companies don't have the monetization model in place today, and or they definitely are going to change it. So I think there's a lot of uncertainty right now, for for revenue leaders and go to market leaders about what is this? What does this do as far as our, our, our what does this do as far as our cat like, are we gonna be spending a lot of time evangelizing and getting people adopt these things, or are they just going to take off?
AMY23:46So we're in an experimentation phase. You want to have things for people to experiment with. That's incredibly important. But my point around making sure you're doing that with customers is so, so important because the faster you can get people to value the faster you're going to be in a position to, to start to think about how, how can these things be monetized in the right way?
RACHAEL24:11And have you been seeing a lot of data out there of, you know, companies trying to push these features, having a lot more churn or issues maintaining, renewals.
AMY24:23So it depends in, I think the historically you're going to have a, a stickier renewal model if you have obviously a way of demonstrating value back to the customer. And if you have a system that's mission critical and their whole source of things, what I find is that, a usage model independent of a platform fee is typically a riskier model from a retention perspective.
AMY24:50Think of it like freemium in a way, but it's like you pay a little bit because people tend to pay usage for things they might be experimenting with. If they achieve a amount of usage, then maybe they want to convert into more of a predictable platform fee. So if there's a way where you can drive customers into a platform fee plus some usage and help them find usage, that tends to be, a little bit more of a predictable model in terms of a churn perspective, I do.
AMY25:18I am, seeing a lot of difficulty with retention conversations because of the uncertainty around AI. We're seeing and I talked to companies all the time about this. This is a core tenet of SAS. But when you can allow customers to down sell, that's obviously better than a cancellation. So having that down sell play an opportunity, you know, something to keep that relationship.
AMY25:42The other thing that we're seeing, being able to save churns today is a pause and resume type of a situation. You're able to allow customer rather than flat out canceling the relationship right now. Let's put a pause on it. Maybe you need to, you know, wait 3 to 4 months and then we can, you know, reengage or turn things back on.
AMY26:03Maybe you've got a leadership change that's happening or that whole team that was using it is gone. And you're rehiring a new team. Okay, let's let's put a pause. We know you're not going to get value until you bring those new people in. And that is something we, did a study on, on that in the subscribed Institute.
AMY26:20And we found that on average, you can save somewhere between 1 and 2, out of six churns by just allowing people to pause their relationship. So there are some tactics that you can use in this time of uncertainty to kind of preserve the relationship all else, which is what we recommend. So it's either hybrid pricing model, the ability to down sell, or the ability to even pause the relationship as being things that we're seeing companies try.
AMY26:45I say the final thing, that we're seeing a move to would be more multi year contracts. So if you're typically an annual contract thinking of you know, can we can we do a three year three year relationship with this customer. That is also something we're actually seeing customers being interested more interested in some of these multi-year arrangements to lock in some predictability for them.
AMY27:07Obviously, they expect there's a lot of innovation and change that's going to happen. And from a customer perspective, that protects them. A little bit from A6X price increase next year because of whatever AI innovation and gives them predictability into the future. And that also benefits that the provider, because obviously it gives them some some more predictability and reliability into their customer relationships over time, rather than than having those year to year relationships.
RACHAEL27:34imagine this to be like super frustrating for revenue leaders, the SaaS business owners who are trying to, you know, keep up with the times, keep up with the technology, and implement these AI changes because everyone from all angles are hearing like, oh, you need AI in your product, or else you're going to fall behind that and your competitors are going to have it.
RACHAEL27:53You won't. And then to do that and turn around and see that, the public doesn't actually really care about that much or want it that much. And potentially churning because of it.
AMY28:03Yeah. You know, and and I'm again, speaking in broad swath. So there could be someone listening to this and be like, quite that is totally false. Our customers are in marketing and they're scrambling like, we cannot put new features out enough. And I'm coming from the perspective of enterprise software. So we're talking to CFOs. We're talking to crows CEOs, heads of engineering.
AMY28:26They want to see it. But also the closer you are to actually impacting a company's revenue, their ability to recognize revenue, their ability to take in payments, and any type of tool that that's where the customers are really being very, very cautious about their adoption. Also, the larger the company that you're selling into, if you're selling into a smaller business, maybe they can absorb the risk in different ways.
AMY28:50If you're selling into private companies versus public companies, maybe they can absorb the risk in different ways. But where I'm seeing a lot of the pause is largely public companies, enterprises where the software itself is really material and impacting parts of the business that, could have a material impact on revenue, could have a material impact on very highly sensitive data or customer data.
AMY29:16And frankly, you know, thinking back to the early days of SAS is the exact same adoption pattern where it was those functions that were a bit more connected to the like, back office side of the business that were much more uneasy about having their data and systems sitting in a data center outside of the company. Then like salespeople who are like, I don't care, I'll just, you know, access it on my mobile phone and I won't involve it and no harm, no foul.
AMY29:44And so it's sort of somewhat of a parallel situation here. But I do think if you're selling enterprise software to really large public companies, that's where you're going to be met with some customer resistance and some policies that you're going to have to figure out how to work around.
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RACHAEL30:18What are some of the, the AI features or just features in general that you've seen, in your data and the data sets you have available to you, really succeed like what's working right now?
AMY30:30Yeah. So I will say, you know, one thing that is really important that is not thought about as much is the time to value for the software itself, even though software as a service is not the heavy physical media software of years ago from an implementation perspective, it still can take a long time to implement enterprise software, even SaaS software, depending on what your data environment looks like at the customer.
AMY30:57And so one really interesting thing, and something I've been very excited about, is, seeing how companies are using AI to help reduce time to value, meaning they're able to get using the software and get productive on the software more quickly because they're spending less time pulling data sets together, architecting the data within the the environment, and actually in internalizing the data within the system and getting productive on it.
AMY31:23So maybe a little bit less sexy feature and not something that people talk about a lot. But being able to shorten an implementation time and being able to help the customer get successful really quickly. On software, sometimes during implementations, you run into these situations where the if the system was meant to change processes because it's taking so long, the customer's like, no, no, no, let's just hold on to the processes we have.
AMY31:47You can speed things up and be more prescriptive in implementation and more self-service using AI. I think that can be really exciting. MXGp server is another thing that we're seeing. You know, just the the ability for customers because it is so, available to write their own and create their own agents to do things. And customers really want to do that.
AMY32:06The more you can make your, data and, and, basically the, the benefits of your tool easily discoverable to that customer, the, the more exciting that's going to be for the customer. And the more longevity that's going to provide to your system. And then, of course, the third thing is the sort of the copilot type model, which is making the the ability to get more out of the system, do different speed up processes, basically, make tasks less clicking, more easy, natural user interface to get things done.
AMY32:42We're all getting really used to how easy it is to to to write system commands and things for ChatGPT, which you used to have to be a coder to get to, to build things like this, you can now use natural language. And so being able to do that within tools show me this. Pull up all of these invoices, show me these receipts.
AMY33:00Give me these customers. Just being able to talk to your tools like you would talk to an assistant. Is also a really something we're all expecting. And I think is really exciting because it's truly bringing the power of a lot of these, these software tools into the hands of the people that are, you know, becoming more effective because of it.
RACHAEL33:22I just I visualize this just like one day just being like Iron Man, just like if you're listening to this and audio you can't see, but my hands are moving in the way that Iron Man does, and he's talking to his computer and building his his, robot models and stuff.
AMY33:36Yeah, I'm sorry that that's a great analogy. I, I, I mean, that's felt so futuristic at the time, those early Iron Man movies. But when you think of it, it's like, yeah, I, I don't like it. Yeah, yeah. I've had moments in my own life recently. We're using some of these tools where I feel like a suit, like I'm, you know, superhero in, in a way.
AMY33:56And that's what that's what we all want to feel. And so how do you how do you create that kind of, of delight within a customer in a way that they're like, wow, I would pay for this. I would this is so much more valuable. And that's again, the slippery slope. So I think that the frustration comes from we can do all of these great things, but our underlying costs for delivering that, we don't have great predictability into understanding that we don't have a great understanding into how the customer is willing to pay for some of that incredible capability.
AMY34:29And, and that's where I really believe that getting from that extractive to the sustainable model means that you've really got to think, first of what is the outcome that's going to delight the customer? How do you guarantee that outcome? How do you create a way of actually tracking that outcome has been achieved and that is where you see people talking about monetization going in the future.
AMY34:53I think there's going to be an intermediate step, which is very much focused on usage. Before we get to true performant outcome type models, in part because we don't know what those outcomes are yet for a lot of these tools, because we are experimenting so much efficiency. Efficiency of what, how valuable is that? Does everyone experience that uniformly?
AMY35:14How do you create a pricing model based on that? Those are all the things that people are asking right now.
RACHAEL35:18And what do you think of the Saints like you know, if somebody asked Ford or Ford had asked customers what they wanted at that time that it was that is faster horse and said he brought them the car. So like, I, I totally agree with the concept of talking to your customers and making sure that you, are having that feedback loop with, with, with your audience and product and marketing and sales and everything.
RACHAEL35:41But what about, you know, the stuff that people don't know, that they don't want to know, that they want yet?
AMY35:46Yeah, that's a really great, I think a great point. And I think that's what's exciting about right now is it is really possible. And some of the tools I'm interacting with today, like, I didn't know I wanted the ability to take my image and put it on the body of a mountain climber and use that in a profile picture.
AMY36:05But I could do that, and it was really cool, but I don't know if I'd pay for that. So I think it's there's a little bit of like when it comes to software and software capabilities, there always should be, visionaries that are out there thinking about what's possible that people can't even conceptualize yet, that we know is absolutely going to be where the market's going.
AMY36:30And I'm so glad that there are visionaries that that do that because, I think in many ways our lives are better for the people that are always out there. Right. And thinking, thinking in that way. But I would say then there's, there's also the reality of how do you get that customer from here to there? And, and I think for many of us, we are not starting from a blank sheet of paper.
AMY36:57We are starting with a customer base that has expectations for, for what we do and the value that we provide. And we want to take them on the journey with us and taking them on that journey. There aren't too many companies that have have, you know, reinvented themselves and been able to bring the entire customer base along with them.
AMY37:18And so you have to be willing to kind of make that if if I'm going to build a horse instead of a car, instead of a horse drawn carriage, do I have the ability to say goodbye to everyone who just wants a horse drawn carriage? And, and in the case of Henry Ford, he was starting something completely brand new from scratch, and so didn't have that, that, that maybe legacy and and so I am working with a lot of companies that do have some of that legacy already and are trying to figure out how do we bridge that chasm.
AMY37:54And there are companies, by the way, who have said goodbye to whole customer bases and Adobe back in the day, is famously brought up as an example when they shifted to their Creative Cloud business model. There were lots of people that said, well, you can say goodbye to me, and that they knew that that was going to be the case, and they made a calculation.
AMY38:14And Microsoft has done this many times over the years as well, that they were going to have to take a short term hit of, of customers because they truly believe that this was the next place to go. And so some companies, particularly larger ones, will have that ability to, to maybe be more visionary and to be willing to, to, lose some customers along in the journey, if that's what it takes.
AMY38:39And, some won't have that, that, license to do that.
RACHAEL38:44So when a company is ready to take this step and iterate on their pricing model and their packaging and everything, what's the right process for them? Like who should be in the room? How should you avoid, analysis paralysis?
AMY38:57Yeah. So we're seeing, you know, it used to be back in the day when I would talk to pricing teams, they'd largely be sitting in products. Product would come up with a schema. They maybe share it with the, the CRO, they maybe share it with the CFO. And, as long as everybody felt okay with it, they roll it out.
AMY39:15And it used to be a much less frequent, iteration. So I remember companies setting new pricing every six years or something along those lines. That time window has compressed. And as that time window has compressed, I've seen more and more of that responsibility sitting within the finance organization. That's the team that's doing the modeling, that's thinking about the business.
AMY39:36And they're obviously taking feedback in from product. They're taking feedback in from, from sales and revenue. The people that are out there, you know, talking with customers every day, but they are the ones that sort of own the model and the business model for the business. You still have people in growth or monetization roles, but they're oftentimes sitting within the office of the CFO, taking input from these other parts of the business.
AMY39:58But they're are ones that are accountable for the operating model, typically. And so that's where those decisions are happening. Having that ability to iterate and move much more quickly is something that's that's important. What? Yeah. The space that I'm in, we run into a lot of companies that have built flexibility by creating SKUs in the product catalog.
AMY40:23And what that means is, every time they wanted to do a one month, you know, one month for product A, or usage for product B, or usage for product A or six month for product A, they just created a new skew. And what that turns into is this incredibly bloated product catalog, which actually slows down your selling time.
AMY40:45It creates a lot of inefficiency in the business. And we have found that companies that have a much, more managed product catalog and a shorter long tail, a product catalog typically grow, faster than those that don't. It varies by software segment. But managing your product catalog is really important, and having the flexibility to monetize and change your monetization approach without having to create a new skew in your product catalog is positively associated with growth.
AMY41:13So I would say from an operational perspective, again, the finance team needs to be involved, but you need to have a capability, as well to do at least hybrid. So some sort of a platform fee plus a usage fee maybe down the road, an outcome based fee, touring models, etc. but build a system where you can have all of that flexibility without creating a hugely bloated product catalog would be what I would advise.
RACHAEL41:38Yeah, and you do spend a lot of time with companies that have a foot in both worlds, right? The recurring revenue and the traditional one time transaction side. So what makes managing those hybrid models so hard and the specific operational challenges?
AMY41:55think that the hybrid models are hard from an operational perspective because of the fact that you need to have the ability to track usage. So a hybrid model typically involves something that's more stable, like a platform fee. That's not super hard to operationalize. I mean, relatively speaking, you have and there's usually some sort of static number.
AMY42:18A customer might estimate it. Let's say it seats. Oh, I need 100 seats of the software. Great. Here's 100 seats. You're going to sign a one year contract. Your price is this. We'll talk at the end of the year and figure out how many seats you want. The a, that is fairly simple from an operational perspective. To do where it gets harder is where you have a seat model, plus something that is more dynamic in that like usage, if your seat count is dynamic, which it usually isn't, the whole point of a platform model is usually to be more predictable.
AMY42:49It can be operationally more challenging if you're like turning in seats. Or maybe you have a seat of one tier. You want to mix and match that with the seat of another tier. That can get complex. But in general, once you start adding usage, that's where things get a little bit more complicated. Why does it get more complicated?
AMY43:07Well, you have to have a system that's actually metering the usage. Then you need to have a rating system. So a rating system takes the usage in so three hours. And then it matches that three hours with a rate. What is that rate for product A for three hours. The rate for this customer is X. And then you need to have the ability to to you know, track that over time and in some scalable way, be able to present that usage back to the customer to be able to generate an invoice on that usage, to be able to recognize revenue based on that usage.
AMY43:43And it has to be auditable. And and, you know, you adhere with all the compliance rules, etc., etc.. So it gets more complex when you're talking, when you get the more flexible that you get, not only because you have to meter and rate things and they happen. It could be like down to the minute or the millisecond. If you think of cloud software, that the amount of rating that happens there and these like telco grade systems is quite complex.
AMY44:09But even more than that, you have to present that back to the customer and they have to trust it, because if they don't trust it, they're not going to pay you for it. And you have to generate a bill which isn't, you know, you don't want to have something super complex for the customer. You've got to summarize it.
AMY44:23So all of those things sound like we've all gotten bills from cell phones or utility companies, etc., etc. it feels maybe simple when you see that, but there's a lot of complexity behind the scenes. A lot of systems complexity and operational complexity that makes that happen. And if you're a CFO, you're all about forecasting the business. What's my next quarter going to look like?
AMY44:43My next quarter? My next quarter. So you're using all of that information as well to predict what's going to happen. The seats are really predictable. The usage and the outcomes are not, especially if you're just starting to get involved with that. So that also is depending on the ratio of predictable to unpredictable, it can cause you, some anxiety as a financial leader because it makes it much harder for you to forecast your business.
RACHAEL45:08So do you recommend people, you know, to try to not do that hybrid model if they can or stick to, you know, just pure the hybrid model. Oh yeah.
AMY45:16Okay. Yeah. I mean like if nobody's demanding that you do it. Sure. I suppose you could, you could sell seats in perpetuity and depending on what you're doing, I mean, there's still companies out there selling perpetual license software. They're doing just fine. Their customers don't want any different. I'm assuming that the listeners of this podcast are looking for sources of growth, and at some point in time, the amount of people that want to use that, that are using your tool will either totally stabilize or even decrease.
AMY45:50I mean, we all know that one of the big plays with AI inside organizations is efficiency. And so the teams are saying that people will need less seats of any given software because of AI. And so if you are only doing a platform fee, you are going to have limited growth. And so the hybrid model, even though it's hard, I don't see, you know, you should still have an approach for that, especially if you are tapped out.
AMY46:20You know, if you know that that seat model is tapped out, what I would say companies should not do is say, oh, seat model tapped out. I'm now full on the gas and usage is not a good idea to do only usage. And in fact, again, data from our system shows that you the sweet spot is somewhere between 1 to 25% of overall revenues should be associated with usage in a hybrid model.
AMY46:44If you get less or more than that, you start to see growth decrease. So you need to have some predictability in the model, not just for the customer, but also for you. But having that usage is absolutely what's going to allow you to see more growth. So it's hard. I wouldn't do it without putting in, for example, a metering and rating system.
AMY47:05You you aren't going to be able to keep up with it using spreadsheets for very long, which some companies do try to do in the early days. But you got to think ahead. But, yeah, it's certainly there's some challenges associated with it for sure.
RACHAEL47:19What are some other like, do's and don'ts of having that hybrid model, whether for people who, think that their company might go in that direction or they're already using that kind of model.
AMY47:30Yeah, I would say, you know, it's fairly simple. So again, you want to have a mix of predictability and you want to have the ability to align. I would say this in terms of the breadth and depth of usage. So if the breadth of usage is the platform fee, the depth of usage is the use intensity. How much is the customer really getting out of it.
AMY47:50And at the end of the day, why do we do any of this? Going back to that symbiosis topic at the very beginning, where are you creating value and what is the customer think is a fair value exchange? And that fair value exchange again, is that breadth and depth? Some customers might roll things out to users and they're not heavily using it.
AMY48:10Others might roll things out to users and they're really heavily using it. Which one is getting more value? Well, if you use usage as a proxy, you could say the customer that's using it more is more likely getting more value and therefore they should pay more. Now the question becomes how much more? This is where you have to be careful with being too extractive.
AMY48:30If you just say like you're getting more value, you have X amount of usage. I'm just going to assume that because you're using ten x more than this customer, you're going to pay ten x more. That model won't work for customers because that's unpredictable for them. That is very extractive. So you have to come up with an approach that measures both of those things that has pricing based on both of those things, but that the customer sees is fair.
AMY48:58And so that means that that usage piece, again, I gave that between 1 and 25% of revenue. Think of that from the customer perspective. That means a very small portion of what they pay you should be associated with usage. It shouldn't be most of what they pay you. Because what happens if that usage model, which is unpredictable, gets to a certain point?
AMY49:17The customer should come to you, or you should proactively go to them and say, I see your usage is really high. It's higher than you expected it would be. That's awesome. Let's move you up to a higher platform tier than you had before. Think of our cell phone plan from years ago. I don't know if you remember. But that was a while ago.
AMY49:36Messaging SMS was not part of the core mail. I don't know if you if I did, but you would pay. At the very early days, people didn't know how many text messages they were going to sell. Like imagine if you were paying per SMS today. Maybe some people are, but like that would be insane. It's now just part of the base platform fee, but like so over time that usage fee serves a really good need for something that's new, aka AI as an example.
AMY50:05But at some point in time, if that feature becomes so widely adopted that people just see like this is core to the functionality of the phone itself, I couldn't send SMSes. Or if I had to think every time I send an SMS, like a picture of a cat or whatever on it, that's like, oh, it's another $0.10. That would be something I would not want to have to try to do the calculation in my head, it's the same thing for customers and enterprise software.
AMY50:30So just being, I think putting yourself in your customer's shoes is the number one thing that anyone can do in these times. And the easiest way of doing that is having a conversation with them. If that's not possible, the next easiest way is thinking about things that you're buying or consuming today, because chances are we're all interacting with these, you know, AI services, etc. would I be happy if the thing I paid $20 a month for suddenly became 2000?
AMY50:59Because that's how much value they figured out I'm getting out of it. I probably would not make that leap, right? Yeah, but I might make the leap to 40, or I might make the leap to 100, or I might like. And so you got to kind of go through the mental math yourself as a human pricing and packaging.
AMY51:17It's all psychology. It's all behavioral. I think that's why I've been interested in this area for such a long time because I like pricing. I'm sure some of my, my peers that do pricing research should be like, what are you talking about? Like the reason I like it is because it comes down to psychology and like, what makes us human and the relationship that you are entering into with a any type of subscription or recurring services, just like any relationship that, you know, sometimes we'll talk about friends who are like, oh, that's more of a transactional friend.
AMY51:52It's the same thing. Like, you don't want to be that transactional friend if you're a provider. Well, okay. Well, what makes you, a something that people don't want to just have one experience with and then move on? How do you actually become part of their inner circle? What do you need to do to be trustworthy? You have to listen.
AMY52:10You have to provide value back. All of those things are what make these models enduring. And so I think getting back to the basics of of that is, is, what a successful company today needs to do.
RACHAEL52:23You've talked before about recurring revenue businesses following a maturity curve. Can you walk us through what that looks like and where companies get stuck?
AMY52:32Yeah, absolutely. So I have a maturity model that I've worked with hundreds of, of companies on. And I'm actually in the process of, building a trust dynamic into that and sort of dusting that off and, working with companies as they try to build AI models. But it's five different stages. And, that's pretty much any maturity model that you're going to see is going to have 4 or 5 stages.
AMY52:55The very first stage of the maturity model is launch, and that is a very exciting stage where you're all about acquisition. So think about any new business. The very first thing that they need to try to do is to get people to sign up. And so they have all kinds of $20 per month pricing, 599 per user pricing.
AMY53:15Like really like hooks out there to get people like, we just want people in to try this thing out. All kinds of promotions. Simply New Coffee Shop opens up like here's a car Deloitte. They could do whatever they can to try to get people to come in and make it exciting. And that part is where I spend a lot of time with companies, making sure that they do actually know who their customer is, that they're going to get value out of.
AMY53:39I mean, there's a lot within the launch stage that you need to do to make sure you're setting yourself up for success in the future, but frankly, that's where you can be very experiment. You have a lot of experiments when you start to shift to the next stage of maturity, as you might expect, that's when companies start to think about, oh, we have people trying the thing and then they're not coming back.
AMY53:59They're leaving. Or we have enough. We've signed up everybody that we can. From a low hanging fruit perspective. We need to figure out, you know, how we how we get new people to sign up because our cost cost to serve is outpacing the revenue that we're getting in. We then need to raise prices on the existing customers that we have, or we need to have a new tier of offerings.
AMY54:22So what we see happening in the next stage is companies really focusing on, on expanding that, that, spectrum of companies, of individuals or companies, depending on whether we're talking B2C or B2B, that they can bring in and starting to think about retention. They're not thinking about expansion plays at all, but they're really focused on how can we retain the customers that we have.
AMY54:46And sometimes that might be who are we good for? Like really having a hard look at for those companies who are staying or those individuals, why? Why are they signing up year after year? What kind of experience are we creating? What kind of moat or recreating? What kind of stickiness or recreating to make people renew and stay around?
AMY55:07And that's when we start to think. People experiment with things like pause and resume and down sales. So I mentioned, that earlier on the dark side of this is one thing we can start to see companies do, which is terrible, is make it hard for people to figure out how to cancel, like they lock the door on them once they get in really bad.
AMY55:29Don't do that. And though.
RACHAEL55:31With people off, I.
AMY55:32Mean, we can all think of things that we like. Okay, this is I don't I'm not getting value out of this anymore. I want to cancel and you can't figure out how to cancel it or you signed up for something online and you've got to talk to a human being to.
RACHAEL55:44Hate that.
AMY55:45Like the worst. So don't do that. But there are things that you can do within that second stage to make sure that you are creating something that people want to stay. So really narrowing down who are we good for and why? And talking to people. You can probably do this with the data within your system if you're a digital product or service, as well and do some behavioral analysis, but also creating streams like the ability to pause and resume a subscription and the ability to down sell.
AMY56:15So that's where people might have maybe they had just a 599 a month for a user per month or something, or, they might start to add on different types of tiers of usage. So like let's not even talk about per user or per usage fees at this point, but maybe you have a different tier, of user fee that you implement this third stage.
AMY56:35And this is where people can start to spin, is your ability to start adding expansion into the mix. So I've brought them in. I've figured out how to get them to stay. Where else can I send them. And you can do that with pricing. You can do that with different features. You can do that with additional services.
AMY56:58But this is where companies tend to spin because this is where experimentation happens. And this is where I'd say a lot of companies are with their AI, which is how do I expand? I've got customers, I've figured out how to retain them. I want to expand that relationship up. Now I have I okay, your bill is six acts like that is not the way to do it.
AMY57:19But that's what we see companies doing because I think, oh, you know, I'm making this huge investment. It's you know, I I've seen the demos. They're absolutely incredible what they can do for a customer. But your specific customer might not be ready to do that thing with you yet. It is hard. But you have to figure out how do I expand it, because that's the only way that a recurring revenue business is going to reach the promise of why you probably have that business model to begin with, which is to see that that, you know, year over year growth rate.
AMY57:51So your ability to bring customers in to retain them and then expand that relationship is so critical. And then moving beyond, you know, in stage four and stage five. And honestly, I don't know how many companies in stage five. That's sort of like the science fiction Iron Man. Eureka, right. You know, I like to always kind of paint this picture of where you could go, but when you can get to stage four, you actually truly have, some growth factors and offers that people are willing to pay money for.
AMY58:24One company that I use as an example of a stage four company and their ability to do this, I think sometimes it's easier to talk about things that we might use in our personal life and in our business life just because we all, like you, probably know this one, or at least something like that is The New York Times and what The New York Times were able to do with.
AMY58:44So I'll use myself as an example. I became a New York Times subscriber during the pandemic because I wanted the money then, but prior to the pandemic, but primarily it was for the news. And then I started to play Wordle, and I got an offer of, oh, why don't you add on games? And I thought, why don't I do that?
AMY59:04Because and that is great. And then, I was searching for recipes on Google and lo and behold, I got an offer for a bundle that included everything, including New York Times cooking. And so they have been able to expand their relationship with me from news to games to including our cooking and The Athletic, because now I have the whole thing.
AMY59:28And then recently I have started to get offers for the family plan, which I have not bet on yet because I can sell gift articles and things like that to my family when I want to see it. But they have done an incredible job using data, using, you know, all of the different sources of data that they have behavioral and to to present me with offers at the right time, at the right price that have been compelling and frankly, that have kept me as a subscriber and kept me growing my, my footprint with them.
AMY60:00Other companies have done this with pure price increases. Netflix is a good example of that. We probably have all, experience with streaming services, pricing kind of going up and up and up at a predictable tax. The argument is like, look at all this original content that we're creating. Look at all this content that we're pulling in from these other streaming providers, these partnerships.
AMY60:22Now we're bringing in live sports, other live events. So that stage four company is constantly looking at ways to expand that relationship with the customer, either through new functionality or through increased pricing.
RACHAEL60:36Awesome. I love that model. So I have one final question for you, Amy. Based on all this stuff, what should Sierra's and revenue leaders be paying attention to right now that you don't think they are?
AMY60:48What is your competitive moat? I think this is one thing that we're spending a lot of time thinking about. I am an operator at a software company. In addition to being someone that advises a lot of companies as well. And so, you know, we we know that we're going to be in a situation where there's going to be a lot of new competitors coming on in our space.
AMY61:12Our customers are going to be getting calls from people who are looking to displace us. There's going to be a shakeup. And so understanding what your competitive moat is and how to, how to how to build on that is so important. So maybe your competitive moat is your vertical expertise. Maybe your competitive moat is your igloo system that sits in between many different systems.
AMY61:37Maybe you're competitive. Moat is you have, an understanding of the regulatory and compliance, environment. And, and your system of record is one that is very, very trustworthy that customers rely on for that. And it'd be much harder for them to say Vive code that internally or for a competitor to, to build something very quickly that rivals that.
AMY61:59Maybe your competitive moat is all the context mapping that you have between different systems. So understanding what that is, is so important from a CRO, perspective. You know, obviously there's a lot of really interesting and I'm sure you, some of your other podcast cover all of the, you know, cool things that are happening within demand. Gen within, AI and the use of AI and go to market.
AMY62:21I'm by no means an expert on that. I know we're trying a lot of things that Zora I'm sure a lot of other companies are trying other things, but there are people, out there with, with platforms that are more versed in that, that I am. But I absolutely I think I just being able to see how much, things like building account plans and doing the research and creating compelling pitches and all like, unbelievable how much time we can save using some of these tools are just, like, mind blowing.
AMY62:54But that means that the bar is, in a way, a bit higher for us to truly understand our customers, because I find there's research that I can do online, and you know what, have you using all the different tools. But it is until I actually have a conversation with a real human being that I can understand the nuance of what's going on within that company.
AMY63:13So that prep work is much faster, but it does not replace the relationship elements that I think have probably separated some of your most successful, people from those that haven't been as successful things like emotional intelligence. The other thing I will say too, is even in this world where with AI and so much innovation happening, from a technology perspective, that real opportunity to look a human in the eye and, share a meal or talk at an event feels like more important than ever.
AMY63:46Our, our live events that that we do and that I attend, people are just so hungry for human interaction and conversation and you when it comes down to it, one of the things I've learned being in the software industry as long as I have is we're not selling ones and zeros. We are not. Nobody wants ones and zeros.
AMY64:03We're selling trust. I trust you that this this thing that you're selling me is going to solve my problem. And that isn't something that, that, that that just happens. Like, there have to be people and reputations and other customers behind that to, to make that occur. So just remembering those, those fundamentals, not get blinded with science.
AMY64:29Which is an old song from, from years and years ago, but blinded by science.
RACHAEL64:34Yeah.
AMY64:34I remember I think about that a lot. And I think there's something but like, people can get almost stressed out by how much is changing and like, yes, it is, but let's remember the second Blinded by Science. Like, let's remember there's a human who's making a decision to buy and use your tool whose job may be on the line if they get it wrong or right, they could be up for a promotion like so.
AMY65:00They're going to want to know that they can trust you. And. And the ways that we create trust haven't changed that much in the last several hundred years. I don't think no matter what's happened on the technology side.
RACHAEL65:11Well, I think that is a great place for us to end it today. Thank you so much, Amy. And where can people find you and the subscribed Institute?
AMY65:19Yeah. So, the easiest place to find me, I guess, these days is LinkedIn. I'm working on a few other things. So maybe by the time you're listening to this, I've got my website and the book is out and all that kind of stuff. But for now, I just say connect with me, LinkedIn. I'm pretty active there. And, really looking forward to how all of these things unfold.
AMY65:39This has been a great conversation to have. Thank you so much for inviting me and thank you. And if you stuck with it all this time, I really would love to talk with you. So please reach out.
RACHAEL65:47Yeah. And, real quick, what's the name of the book that's coming out?
AMY65:51I don't know yet. Amy's, but I hope Amy's book.
RACHAEL65:54Awesome. Last. Okay.
AMY65:57Yeah. But I think a lot of things that we talked about as far as monetization models, the maturity framework, trust architecture, that's all all part of of of what I'm putting out. The idea is to give people a framework that they can use as they're, you know, working through a lot of the operational complexities, the cultural and process and strategy changes that they might need to make as they're trying to adapt to, to what's happening out there.
RACHAEL66:22Awesome. Well, thank you so much, Amy. Have a good day.
AMY66:26Okay. Bye now.
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