Alp SuleimanGrowth Partner

Seat-Based Pricing

Pricing where the customer pays for the number of people (seats) using the product; a fixed monthly or annual fee per user. The price is predictable and easy to explain, but the fee is tied to the number of users, not to the work the product delivers.

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In practice

In the 40 AI startups Poyar and Broe reviewed in 2024, most companies charge based on the number of users, which the authors link to AI being sold as a copilot that assists the employee. According to the authors, customers can end up buying more seats than they need; monthly active user rates between 20% and 40% are not uncommon (the authors' observation, not a measured sample). As products deliver the work rather than assist the employee, the seat fee can detach from value (our reading). In 2025 Poyar makes the point about agents too: the value of AI agents does not scale naturally with buying more seats. That does not mean the seat is dead; where value grows with the number of users, a seat can still make sense (our reading). As the product gets better at automation, the customer needs fewer seats, so revenue can fall as the product improves (our reading). Before choosing a seat, ask: do my cost and the value the customer gets grow with the number of users?

Sources

  1. 1.Kyle Poyar, Palle Broe: The state of AI pricing at 40 leading startups
  2. 2.Kyle Poyar: Your pricing is (probably) broken

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