Kent Keirsey, Invoke's founder and CEO, explains the company's seat-based pricing model designed to minimize friction for early adopters. The price is anchored to existing consumer tools enterprises already use, with bundled usage included and overage charges only after a threshold. Pricing will evolve as compute costs change and the product proves more value.
what have you learned about the way you're going to price and package as the company has grown?
I mean, I think the reality is that any company who's doing this has a very complicated road when it comes to pricing and packaging. But for our pricing journey, what we started with was really like, how do we avoid friction? How do we make it super simple to price this? We don't want to get into like, we're going to charge you credits and tokens and this and that the other, because like, the buying process becomes super hard and it's already a hard sell, right? Because where people are trying to figure out how to like transition their organization to a new way of doing things. So we want to make it as easy as possible to get in and figure out some of those pricing decisions later because it's all going to evolve anyways. It's all going to change. So our pricing is relatively simple. We started with seat-based pricing and a consumption component that only comes into play if you go past a certain threshold. So basically you've got a seat, it comes bundled with enough usage for the average user. You won't have to worry about consumption, and you only ever hit a consumption threshold if you're using it a lot. So like, we'll worry about that if we get there, and that's affordable as well. And that's kind of how we make that buying process super seamless. I think tying it to the number of users in the organization helps keep the cost reasonable.
How do you determine the value of your seat?
I mean, yeah, it's, it's incredibly hard, right? I, I think I, I would say if anything, I feel like we're underpriced to what we will eventually need to charge to, to sustain the business. Part of that though is because we're anchored at these consumer solutions, right? The pricing that we are competing against is not just other like enterprise apps, there are a number of consumer-ish competitors that enterprise organizations have already been using. Right? And so you, you were kind of anchored at that consumer price because that's how the market emerged. And so for us, the most important thing was making that transition super simple, making it obvious, and then helping them understand the value in the long term. Does that mean that our pricing will need to change at some point? Probably. I mean, it's going to have to evolve anyways because the compute costs are changing and it's just like constantly in a dynamic. Environment. But the other thing is we can build add-ons, we can build other services, we can sell into that organization. So our strategy right now, and I think this kind of like maybe is a shift in pricing and packaging strategy perspective for me running this business, is we want to build a strong relationship with the biggest companies in the world as their partner solving this problem. And over time, the contract value will increase as we deliver that value, as we prove out that value, and as we expand into that organization. It's, it's a different way of selling than just focusing on like pricing as an end.
Yep. And just to play it back, what I, what I think I hear you saying is early on in this business, our pricing, like the actual price itself of the seat, will be predicated around reducing friction. It will be contextually aware of the anchors given the large consumer companies. It will be designed for adoption. We have an opportunity to lift pricing over time as we earn the right to lift pricing by providing more product value.
That is You're exactly right. I want to earn every dollar that we make. I want to earn that by building a product that delivers value. And I think that is what our customers start to understand as they work with us is like, hey, you know, we understand it's early. We understand that you guys are probably going to have a significant amount of time where you're just figuring out how to make this work for you. We want to be the partner that makes it low friction to get in, low friction that like actually begin getting value. And as we earn the price increase over time. As we demonstrate the value that we're offering as a partner, that is how we increase our prices.
