Design the Wave. Don't Just Ride it. - by Alex Oppenheimer

Business Model Logic

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Design the Wave. Don't Just Ride it.<br>Every pricing model trades growth for stability. The best ones refuse to compromise.

Alex Oppenheimer<br>Jul 22, 2026

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Most founders think pricing is how they collect money. It is. But that’s the smaller half of the job. Pricing is an engagement mechanism . It teaches your customers how to behave, and they learn the lesson whether or not you meant to teach it.<br>AI is still operating mostly as a raw technology, and customers have not figured out (or been guided properly towards) how to engage with it at scale. My hypothesis is that if we can clarify the business model, the use cases will become less hand-wavy and more value-driven.<br>Every pricing model trains a behavior. And underneath every model is the same trade: you can have explosive growth, or you can have stability . Never both. There is no free lunch. There’s only the choice of what you pay with, made honestly or made by accident. Time the market right, and you may only see one side of the volatility curve , but at some point, you’ll have to pay the piper one way or another.<br>Here’s the ladder:<br>One-time sale

You buy the thing, it works, the story ends . Think jewelry, or an old-school computer. No recurring revenue, so no volatility, no upside, no downside. Amplitude zero. The baseline everything else departs from.<br>Behavior: just deliver.<br>Appliance plus renewal

Close to the best business ever designed, once you’re locked in. Thin margin on the box, near-total margin on the renewal, boringly reliable revenue .<br>Behavior it teaches: stay. The catch is the cost of getting there. Winning that lock-in is slow and expensive.<br>Subscription (SaaS)

Sold on growth through less friction, and the friction it removed was the fear of commitment. The pitch, spoken or implied: if you don’t like it, you can churn. A prenup with your customer. It gets people in the door faster because leaving is easy, and you bet they stay. Churn isn’t a bug, it’s the deal. And it costs you: because they can leave, you have to keep earning them, which is why SaaS runs at lower margins than the license business it replaced.<br>Behavior: try it. We hope you’ll stay.<br>Usage-based

Here’s where it turns. Every model above was at worst neutral about usage. This one is against it. Pay for what you use, and you go looking for ROI on every unit, which is a polite way of saying you look for reasons to stop . The minibar: the water is an arm’s reach away, but the meter’s running, so you walk to the shop across the street. I do it with tools I pay for, rationing them, pushing everything I can to the free version, getting good at not using the thing I’m paying for. People value what they pay for, but they don’t pay for what they value. The meter makes you value the rationing.<br>Behavior: use less. Which is the one thing your business can’t afford them to learn.<br>Outcome-based

The purest-sounding alignment: charge for results, win only when they win. Beautiful when it works, and it captures value you could never charge for up front. But you’re no longer betting on your product. You’re betting on your customer’s ability to use it, and most of that is out of your hands and even unknowable. You let the dog off the leash. It might do wonderful things, it might destroy your house.<br>Behavior: hope.<br>Stay. Try it. Use less. Hope.<br>That’s the surface. Underneath is one variable: volatility , and it grows at every rung.<br>Volatility cuts both ways. Usage climbs faster than a subscription ever could, and falls faster too, because nothing holds it up. If the economy tightens, a subscription customer waits until the term ends to leave. A usage customer just stops, same day. An outcome customer just lost their customer for reasons unbeknownst to you.

The rigorous name for this is the discount rate - it’s how we finance nerds price risk. Revenue quality lives in the contract. Multi-year prepaid is the most durable, so it’s worth the most. Subscription next. Usage less. Outcome-based, dependent on a dozen things you don’t control, is worth the least. Same dollar today, wildly different values, depending on the behavior your contract trained. Between each level, there is a trade-off point, but don’t pretend a dollar of usage-based revenue is worth as much as a dollar of appliance revenue.<br>So the takeaway isn’t really about pricing. Your customers behave according to the alignment you write into your contracts. Not the alignment you were hoping for. The one you actually wrote down. Want them using the product? Don’t put a meter on it. Want them to stay? Give them a reason the contract makes real. You know the value of your products and what it costs you to deliver better than anyone else - use that to your advantage.<br>Which is why the best example looks like it broke the rule.<br>Shopify reads as SaaS plus usage-based. Look again. People build their businesses on top of it, which is...