A value metric is the thing you charge for: a seat, a thousand API calls, a gigabyte, a transaction, a resolved ticket. Patrick Campbell's line is that if you get everything else in pricing wrong but get the value metric right, you will be fine, because the right metric means your revenue grows as the customer gets more value without you renegotiating. Pick it by finding the activity that best tracks the outcome your customer cares about, not the one that is easiest to meter. Watch out for metrics that punish adoption, because charging for something people need to do more of will quietly cap your growth. Seats are the default and are increasingly a bad default as software does more of the work.
3 hand-picked resources, 1 India-specific, 3 link-checked. Pick how you want to dig in.
Why we picked it Campbell ran pricing research at ProfitWell across thousands of companies, and his sequence (value metric, then segments, then experiments) is the one to follow. The line worth memorising: get the value metric right and you can get a lot of the rest wrong.
From Lenny's Newsletter by Patrick Campbell with Lenny Rachitsky long read
Open lennysnewsletter.com →Why we picked it Gives you a way to actually pick a value metric rather than just being told to have one: plot activities by frequency and importance, then monetise the medium-medium ones and subsidise the high frequency ones. Worked through with CleverTap as the example.
From Accel India Insights (SeedToScale) by Dr. Ajay Sethi long read
Open medium.com →Why we picked it Maps tiers to how adoption actually spreads (casual user, professional, team, organisation) rather than to a feature matrix, using Notion, Databricks, GitHub and dbt. The best argument for delaying monetisation until usage patterns are legible.
From Andreessen Horowitz by Jennifer Li and Martin Casado long read
Open a16z.com →How pricing and packaging reads from a different seat.
The same ground, over in Money, pricing & model, our Starting Up track.
The same ground, over in Money, pricing & unit economics, our D2C track.
