In this episode, a16z GP Martin Casado sits down with Metronome CEO Scott Woody to unpack how AI is fundamentally changing the value proposition of software—and why that shift demands a rethink of the traditional SaaS business model.

They explore how, in the cloud era, value scaled with the number of users accessing a shared system (think Salesforce). However, in the AI era, value shifts to the work the software performs on your behalf, automating tasks such as writing code or resolving support tickets. As a result, the old value metric of “users” is being replaced by “output,” and it’s upending how companies monetize.

This conversation goes deep on:
- What new pricing models will emerge in an AI-native world
- Why usage-based billing is gaining ground—and where it breaks
- How to align GTM teams and customer success orgs with evolving value metrics
- Strategic advice for SaaS founders navigating hybrid business models and incentive design

If you’re selling software today, you don’t want to miss this discussion.

Follow everyone on social media:
- Scott Woody https://www.linkedin.com/in/scott-woody-21677121
- Martin Casado https://x.com/martin_casado

Check out everything a16z is doing with artificial intelligence, including articles, projects, and more podcasts here: https://a16z.com/ai/

Topics Covered:

00:00 Introduction
00:46 What is Metronome?
03:49 Problems and Complexities of Billing
06:14 Usage Based Billing
09:07 The Rise of Hybrid Business Models
11:02 Challenges With Building Billing Infrastructure Software
15:23 Strategic Usage Billing Advice
16:52 Aligning Incentives With Customers
19:36 Top 5 Concerns For CEOs Considering Usage Based Billing
21:09 The Role Of CS Teams
21:55 Core Value Metrics For The Customer
25:15 Which Software Based Companies Will Go To Usage Based Billing?
28:19 Emerging Patterns, and Recommendations
31:12 Pricing Models, Agility, and Shifts In Pricing
35:09 Market Dynamics, Competitive Dynamics, and Spend
36:48 Monetization In This AI Wave
39:25 How To Architecture Business Around Billing

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