SaaS Price Hikes: Why Your Seats Are Shrinking! #shorts

Name: SaaS Price Hikes: Why Your Seats Are Shrinking! #shorts
Uploaded: 2026-02-10T11:43:25+00:00
Duration: 1 min 43 s
Channel: Jason M. Lemkin
Description: In this short monologue, Jason M. Lemkin explains why recent SaaS price hikes are becoming counterproductive. He argues that raising prices only works up…

10 Feb 2026 · 2 min

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1:43

In this short monologue, Jason M. Lemkin explains why recent SaaS price hikes are becoming counterproductive. He argues that raising prices only works up to a point; beyond that it crowds out upsell opportunities and accelerates seat contraction. Lemkin points to macro trends—AI budget constraints, flat or shrinking headcounts at large SaaS firms like Workday and Shopify, and overall workforce reductions—that are pressuring customers to buy fewer seats. He notes that while tapping into AI budgets (e.g., Palantir deals) can provide a temporary boost, it’s not a sustainable solution. Lemkin also critiques the notion that clever pricing tweaks (such as per‑token models) can overcome the fundamental limit that many customers simply won’t pay more than a certain amount for a product, labeling this a common consulting fallacy.

Chapters

price increases is almost self-defeating because it, it, it only works so long. And so if you're not tapping into the AI budget, that's, you know, Mark, when he was on this show and his own show was saying how much better a deal Palantir got. I think that was echoed in some of these Army contracts 'cause maybe he had to take a haircut on those deals and get the budget where it is. And so it's there, it's just, there are so many other issues unfortunately that are attacking SaaS. The, our seat contractions are existential. Workday said seats are perpetually under pressure. We are— Shopify has held headcount flat for 3 years and grown 40-something percent in that time. We're not hiring anybody and we're going to hire less people. Price increases have become destructive because, uh, SaaS price products are up 40% the last 3 to 4 years. And that's great for a CRO to make their plan this quarter, but it crowds everything out. There's no room to upsell or anything when price increases take up everything. Um, and so there's like all these different issues. If we're not buying as many seats and we're radically increasing pricing, there's just multiple ways the old model's getting attacked. And if it were just as simple as adding an agent, that would be hard enough, but it's not. Um, and our workforces are shrinking, and what we expect from our workforces is shrinking. And so SaaS will adapt, and we— sure, we will get, um, but just magically charging per token doesn't necessarily change the fact for many, for many providers, you know, very tweaking pricing models doesn't change how much folks want to spend for a product, right? That's a fallacy. That's, that's what consultants do. They're pricing consultants. It's great, but if no one wants to pay more than $20 grand a year for your product, you can't force them to with a clever pricing model.