Challenges of Pricing AI with Steven Forth

Steven Forth is Ibbaka's Co-Founder, CEO, and Partner. Ibbaka is a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business designed to help companies create and capture value.

In this episode, Steven discusses the challenges of pricing AI, primarily due to the limited availability of data. He emphasizes the importance of shortening the time required to build value models in order to easily establish pricing.

What you will learn from this episode:

• Discover the complaints and challenges associated with pricing AI
• Enhance transparency in establishing the price point with creating value models
• Find out the most recent advancements in AI pricing concerning language models and software, which greatly enhance productivity

"Once you have a good value model, coming up with pricing is maybe not trivial but it's certainly much easier."

- Steven Forth

Topics Covered:

01:15 - Discussing complaints about AI through the Value Models

07:57 - Steven's added thoughts to Mark's suggested solution to achieve pricing transparency [limitations in creating value models]

11:43 - The need for more trainings for language models used in pricing

14:25 - What is Copilot by Microsoft and what it is capable of doing that can help salespeople

17:04 - How is Copilot might disrupt the market especially Google Workspace user

17:50 - Survey of people's willingness to pay $30 a user for Copilot [and whose group is more willing to pay more]

22:20 - How were the users segmented, are they all Copilot users, and finding out people's reaction to AI

23:37 - The amazing capabilities of these two AIs

24:57 - What could happen if Mark Stiving will use AI to write his fourth book [The need for great prompt engineering]

28:12 - How are AIs going to be priced

29:59 - Microsoft Copilot as a 'Will I' question

Key Takeaways:

"If you can build a value model and validate a value model, then you can fairly easily, I believe, derive pricing from the value model." - Steven Forth

"We should be able to customize a language model based on our training and integrate mathematical AI from a place such as Wolfram/Alpha to greatly scale up our ability to build value models so that we could legitimately do a thousand a year or so." - Steven Forth

Resources/People Mentioned:

• Craig Zawada: https://impactpricing.com/podcast/ep95-defining-no-touch-and-self-serve-pricing-with-craig-zawada/
• PROS: https://pros.com/
• Vendavo: https://www.vendavo.com/
• Zilliant: https://www.zilliant.com/
• McKinsey: https://www.mckinsey.com/
• Wolfram/Alpha: https://www.wolframalpha.com/
• iGenius: https://www.igenius.ai/
• Hugging Face: https://huggingface.co/
• OpenAI: https://openai.com/
• Figma: https://www.figma.com/
• Notion: https://www.notion.so/product

Connect with Steven Forth:

• Email: steven@ibbaka.com
• LinkedIn: https://www.linkedin.com/in/stevenforth/

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com