The stickiest software is critical but inexpensive relative to a customer's overall budget, like payroll services. This 'Goldilocks zone' makes the software too small a cost for C-suite review, yet too embedded to easily replace, creating a powerful moat.

Stop targeting the ambiguous "mid-market." Your strategy, hiring, and ACV must align with either a marketing-led SMB motion or a sales-led enterprise motion. Blending them leads to failure as they are distinctly different games.

For consumption-based models, simple size-based segmentation (SMB, Enterprise) is insufficient. Stripe and Vercel use a two-axis model: company size (x-axis) and growth potential (y-axis). A small company growing at 200% YoY is more valuable and warrants more sales investment than a large, stagnant one.

SaaS companies serving SMBs in non-tech industries can create a new revenue stream by offering a managed service—using humans-in-the-loop but framed as an "AI boost"—to run marketing campaigns for them. This provides immense value and captures more of the customer's budget.

Standard SaaS pricing fails for agentic products because high usage becomes a cost center. Avoid the trap of profiting from non-use. Instead, implement a hybrid model with a fixed base and usage-based overages, or, ideally, tie pricing directly to measurable outcomes generated by the AI.

AI is making core software functionality nearly free, creating an existential crisis for traditional SaaS companies. The old model of 90%+ gross margins is disappearing. The future will be dominated by a few large AI players with lower margins, alongside a strategic shift towards monetizing high-value services.

The macroeconomic shift to a high-margin, high-interest-rate environment means SaaS companies must abandon the 'growth at all costs' playbook. Pricing decisions, such as usage-based models that delay revenue, have critical cash flow implications. Strategy must now favor profitability and immediate cash generation.

To avoid the customization vs. scalability trap, SaaS companies should build a flexible, standard product that users never outgrow, like Lego or Notion. The only areas for customization should be at the edges: building any data source connector (ingestion) or data destination (egress) a client needs.

Move beyond selling features by offering a "Business Process as a Service" (BPaaS) solution. This involves contracting directly on the business outcomes clients care about, such as cost savings or revenue optimization. This model delivers an end-to-end capability and aligns your success directly with your customer's, creating a powerful value proposition.