Pricing Strategy: Legionis

The AI-Powered Operating System for Product Organizations

Version: 2.0 Date: 2026-02-18 Owner: BizOps Status: Accepted (Token Bank model approved) Product: Legionis Related: DR-2026-001 (Pricing Model Pivot), DR-2026-004 (Token Bank Pricing), pricing-usage-based-model.md, financial-plan.md, token-economics-byok-vs-managed.md


1. Executive Summary

Pricing Philosophy

Legionis pricing must achieve three objectives simultaneously:

  • Accessibility: Low enough to attract individual PMs evaluating the product
  • Sustainability: High enough to maintain >40% gross margins as usage scales
  • Expansion: Structured to enable natural upgrade paths from Free to Enterprise
  • Strategic Intent: We are pricing a Product Operating System, not a chatbot or AI feature. Our pricing should reflect the value category of professional PM tools ($50-150/mo), not consumer AI tools ($10-20/mo).

    Key Decisions

    DecisionChoiceRationale
    Value metricOperations (skill invocations, agent spawns, gateway sessions)Aligns cost with value; heavy users pay more
    Pricing modelUsage-capped tiers with overage billingPredictable for users, manageable COGS risk
    Launch price point$39/mo Pro, $119/mo Pro Plus (Hybrid)Balances accessibility with margin protection
    Model gatingTier-based (Haiku only for Free, +Sonnet for Pro, +Opus for Pro Plus)Primary COGS control mechanism
    Free tier strategy500 ops/month, Haiku only, 7-day contextMeaningful evaluation without COGS liability
    Managed token billingPrepaid Token Banks at 15% markup (DR-2026-004)Replaces 30% metered model; better UX, eliminates credit risk, lower Stripe fees
    BYOT positioningBYOT is the hero path; Token Banks are the convenience on-ramp"Bring your own keys for zero markup, or use our credits for instant setup"

    Pricing Evolution Context

    This strategy reconciles two existing pricing frameworks in the Legionis documentation:

    This document supersedes both with a unified usage-based pricing strategy at $39/$119, incorporating learnings from both approaches.

    Managed Token Billing: Token Bank Model (v2.0)

    As of DR-2026-004 (2026-02-18), managed token billing uses Prepaid Token Banks at 15% markup, replacing the previously proposed 30% metered model. BYOT (Bring Your Own Token/Keys) remains the hero path.

    Token Bank Structure:

    Credit PackPriceBonusEffective Markup
    $10$11.50None15%
    $25$28.75None15%
    $50$57.50$5 bonus credits~10% effective
    $100$115.00$15 bonus credits~8% effective

    Key mechanics:

    Why Token Banks beat 30% metered (per DR-2026-004):
  • Eliminates credit risk: Legionis never fronts API costs. Prepaid = cash collected before service rendered.
  • Reduces Stripe fees: One charge per top-up vs. daily/monthly metered charges. Fewer transactions = lower processing costs.
  • Better UX: No surprise bills, predictable spending, user is always in control.
  • Competitive positioning: 15% is significantly lower than typical AI platform markups (20-40%). Feels fair.
  • Natural BYOT funnel: Power users who spend $100+/mo will self-select to BYOT for zero markup. This is the intended behavior.
  • BYOT remains the hero:


    2. Market Context

    Pricing Landscape Analysis

    The AI/PM tool market creates a pricing paradox: consumer AI tools have established a $10-20/mo anchor, while professional PM tools command $50-150+/mo. Legionis must navigate between these anchors.

    Consumer AI Tools (Low Anchor)

    ProductPriceValue MetricLimits
    ChatGPT Plus$20/moUnlimited chatsSoft cap (~50 msgs/3hrs for GPT-4)
    Claude Pro$20/moUsage-basedSoft cap on premium models
    GitHub Copilot$10/moPer seatUnlimited suggestions
    Cursor Pro$20/moPer seat500 fast requests/mo

    Buyer psychology: "AI should cost ~$20/mo" -- this is the anchor we must overcome.

    Professional PM Tools (High Anchor)

    ProductPriceValue MetricTarget
    Productboard$50-180/user/moPer seatMid-market to Enterprise
    Aha!$59-149/user/moPer seatStrategy-focused teams
    Jira Premium$15-30/user/moPer seatExecution-focused
    Pendo$15K-50K/yr flatPlatform feeProduct analytics

    Buyer psychology: "Professional PM tools cost $50-100+/mo" -- this is the anchor that justifies our pricing.

    Our Position

    Legionis sits in the gap between these categories. We are not a chatbot with memory (ChatGPT). We are not a legacy roadmapping tool (Productboard). We are a Product Operating System -- a new category.

    Price positioning: Above consumer AI ($20), below enterprise PM platforms ($60+), at the professional individual tool price point ($39-119).

    Willingness-to-Pay Analysis Framework

    Since we have no WTP data yet, here is the framework for validation:

    Van Westendorp Price Sensitivity Meter (execute during POC):

  • At what price would you consider Product Org OS too expensive to consider? (Too Expensive)
  • At what price would you consider it to be priced so low that quality must be questionable? (Too Cheap)
  • At what price would you consider it a good value? (Bargain)
  • At what price would you consider it starting to get expensive, but still worth considering? (Expensive)
  • Gabor-Granger Direct Questioning (execute during POC):

    Conjoint Analysis (execute during Phase 1): POC Validation Plan:

    Category Positioning Decision

    Positioning OptionImplicationPrice RangeRisk
    "AI Assistant for PMs"Competes with ChatGPT$15-25/moCommoditized, race to bottom
    "AI-Native PM Tool"Competes with Productboard/Aha!$50-100/moHigh friction, slow adoption
    "Product Operating System" (chosen)New category$39-119/moCategory creation risk, but defensible

    Decision: Position as "Product Operating System" -- this justifies pricing above consumer AI tools without requiring enterprise sales cycles. The category creation effort is the marketing cost; the pricing benefit is worth it.


    3. Value Metric Analysis

    Why "Operations" as the Value Metric

    An "operation" is defined as: a single skill invocation, agent spawn, or gateway session that consumes Claude API tokens.

    Value metric evaluation criteria:

    CriterionOperationsSeatsProjectsContext StorageFeatures
    Aligns with customer valueStrong -- more ops = more product work doneModerate -- headcount != usageWeak -- what's a "project"?Weak -- storage != valueModerate -- feature gates feel arbitrary
    Aligns with our costsStrong -- ops directly drive API COGSNone -- seats don't cause costsNoneWeak -- storage is cheapNone
    Easy to understandModerate -- "operation" needs definitionStrong -- per userModerateWeakStrong
    Predictable for buyerModerate -- monthly caps helpStrongStrongModerateStrong
    Scales with valueStrong -- power users pay moreModerateWeakWeakWeak
    Supports upgrade pathStrong -- hit cap, upgradeWeakWeakModerateStrong

    Score: Operations win on 4 of 6 criteria, particularly on cost alignment and scaling with value.

    Alternative Value Metrics Considered

    Per-Seat Pricing

    Per-Project Pricing

    Context Storage

    Feature Gating

    How the Value Metric Aligns with Customer Value Perception

    The core insight: an operation is a unit of product work done.

    Each operation delivers discrete, measurable value (tracked by the built-in ROI system). This means: The ROI tracking is the single most important conversion mechanism. When a Free user sees "You saved 8 hours this month (500 operations). Upgrade to Pro for 5,000 ops and save 80+ hours/month" -- that's a compelling upgrade story.


    4. Tier Architecture

    Tier Overview

    DimensionFreeProPro PlusTeam (Future)Enterprise (Future)
    Price$0/mo$39/mo$119/mo$59/user/mo (min 5)Custom ($15K+/yr)
    Operations/mo5005,000Unlimited*Pooled (5,000/user)Unlimited
    Model AccessHaiku onlyHaiku + SonnetHaiku + Sonnet + OpusAll modelsAll models
    Context Retention7 days90 days1 year1 yearUnlimited
    Storage50MB500MB5GB10GB sharedUnlimited
    SupportCommunityEmail (48hr SLA)Priority email + SlackPriority emailDedicated + SLA
    Speed/QueueStandard (shared)PriorityDedicated capacityPriorityDedicated
    Opus AccessNoneLimited (3/day)FullFullFull

    *Fair use policy: 50K ops/month soft cap for Pro Plus


    Free Tier: The Evaluation Engine

    Target Persona: Individual PMs evaluating the product, hobbyists, open-source plugin users curious about the SaaS experience.

    What They Get:

    What's Gated: Upgrade Triggers:
  • Operations cap hit: "You've used 450/500 operations. Upgrade to Pro for 10x capacity."
  • Context expiration: "3 decisions from last week are expiring tomorrow. Upgrade to keep your context for 90 days."
  • Model limitation: "This strategic bet would benefit from Sonnet-level analysis. Available on Pro."
  • ROI threshold: "You saved 8 hours this month. Pro costs $39/mo -- that's less than $5/hour saved."
  • Storage limit: "Your context registry is approaching 50MB. Upgrade for 10x storage."
  • Pricing Rationale: Free tier is a pure acquisition cost. Philosophy: enable meaningful evaluation without creating COGS liability. The 500-op cap allows ~2-3 weeks of moderate daily use before hitting limits. Haiku-only gating is the primary COGS control.

    COGS Estimate:


    Pro Tier: The Revenue Engine ($39/mo)

    Target Persona: Individual PMs doing regular product work. "Strategic Sarah" -- the senior PM who needs this daily.

    What They Get:

    What's Gated: Upgrade Triggers:
  • Operations cap approaching: At 80% usage, prompt: "You're at 4,000/5,000 ops. Upgrade to Pro Plus for unlimited."
  • Opus desire: "This QBR deck would benefit from Opus. Get unlimited Opus on Pro Plus."
  • Overage accumulation: When monthly overage >$40, prompt: "Your overages this month ($52) almost cover Pro Plus ($119). Upgrade and save?"
  • Context aging: "Your Q1 strategy decisions (85 days old) will expire in 5 days. Pro Plus retains context for 1 year."
  • Heavy PLT usage: "You're running 5+ PLT sessions/week. Pro Plus gives you dedicated capacity for instant responses."
  • Pricing Rationale: $39 is the compromise position between PMM ($29, accessibility) and BizOps ($49, margin protection):

    COGS Framework:

    Pro Plus Tier: The Power User Tier ($119/mo)

    Target Persona: Product leaders managing multiple products, fractional CPOs, consultants serving multiple clients. "Scaling Steve" at an individual level.

    What They Get:

    What's Gated: Upgrade Triggers (to Team tier):
  • Collaboration signals: "You've exported 5 reports this month. Share directly with your team on the Team tier."
  • Multi-user interest: "Looking for shared context? Team tier gives your team a shared workspace."
  • Pricing Rationale: $119 maintains premium positioning:

    COGS Framework: Fair Use Policy:

    Team Tier (Future -- Phase 3): Collaborative Product OS ($59/user/mo)

    Target Persona: Product teams of 5-15 PMs. "Scaling Steve" buying for his team.

    Design Principles:

    Pricing Rationale: $59/user/mo (min 5 seats = $295/mo entry) Note: Team tier pricing may need to adjust based on actual Pro Plus adoption and COGS data from Phases 1-2.


    Enterprise Tier (Future -- Phase 5): Custom ($15K+/yr)

    Target Persona: Enterprise product organizations with 50+ PMs. "Compliance Carol" -- the CPO.

    Design Principles:

    Pricing Rationale: $15K/yr minimum (10-seat minimum at ~$125/seat/mo)

    Overage Billing (Pro Tier Only)

    Free tier has a hard cap (no overages). Pro Plus is unlimited. Overages apply only to Pro tier.

    Overage BandRateExample
    5,001 - 7,500 ops$0.01/operation6,000 ops = $10 overage
    7,501 - 10,000 ops$0.008/operation8,000 ops = $10 + $4 = $14 overage
    10,001+ ops$0.006/operation12,000 ops = $10 + $20 + $12 = $42 overage

    Design Intent:

    Alternative Considered: Hard cap at 5,000 (upgrade required). Rejected because mid-workflow interruptions frustrate users and increase churn risk. Overages are less disruptive.


    5. COGS Framework

    Cost Structure per Tier

    Model Cost Structure (populate with actual Anthropic API rates):

    ModelCost per 1M Input TokensCost per 1M Output TokensTypical Use Case
    Haiku[TBD: Your API rate][TBD: Your API rate]Fast operations, simple queries
    Sonnet[TBD: Your API rate][TBD: Your API rate]Standard operations, most skills
    Opus[TBD: Your API rate][TBD: Your API rate]Complex analysis, strategic work

    Average Operation Token Usage (Framework)

    Operation TypeAvg Input TokensAvg Output TokensTypical ModelBlended Cost per Op
    Simple skill (user story, context recall)[TBD][TBD]Haiku[calculated]
    Standard skill (PRD, decision record)[TBD][TBD]Haiku/Sonnet[calculated]
    Complex skill (business case, QBR deck)[TBD][TBD]Sonnet/Opus[calculated]
    Agent spawn (single @pm, @ci)[TBD][TBD]Sonnet[calculated]
    Gateway session (@plt, @product)[TBD][TBD]Sonnet/Opus[calculated]

    Measurement Method: Run 100 operations of each type in production environment, log token counts, calculate averages. This MUST be done before launch pricing is finalized.

    Expected Model Mix by Tier

    TierHaiku %Sonnet %Opus %Rationale
    Free100%0%0%Model gating enforced
    Pro70%25%5%Most users stick to simple/standard ops
    Pro Plus40%40%20%Power users doing strategic work

    Validation Method: Track actual model mix in first 90 days. If Pro tier Opus usage exceeds 5%, tighten daily Opus limit from 3 to 1 or remove entirely.

    Blended COGS Calculation Framework

    Tier COGS per User = (Avg Operations/User/Month) x (Blended Cost per Operation)

    Where: Blended Cost per Operation = (Model Mix % Haiku x Haiku Op Cost) + (Model Mix % Sonnet x Sonnet Op Cost) + (Model Mix % Opus x Opus Op Cost)

    Margin Analysis Framework

    TierPriceCOGS TargetGross Margin $Gross Margin %
    Free$0<$5-$5 (loss leader)N/A
    Pro$39<$30>$9>23% (minimum)
    Pro$39<$25 (target)>$14>36% (target)
    Pro Plus$119<$55>$64>54%
    Pro Plus$119<$45 (target)>$74>62% (target)

    SaaS Benchmark: Healthy SaaS companies target 60-80% gross margins. At launch, we accept lower margins (23-36% for Pro) to prioritize accessibility, with a clear path to 60%+ via COGS optimization.

    Intelligent Model Routing (COGS Optimization)

    Goal: Minimize COGS by routing operations to the least expensive capable model.

    Routing Rules (applied automatically):

  • Simple operations --> Haiku (all tiers):
  • - Context recall, feedback search, phase checks - User stories, feature specs (short documents) - Single-agent spawns for well-defined tasks

  • Standard operations --> Haiku or Sonnet (Pro/Pro Plus):
  • - PRDs, decision records, competitive analysis - Multi-step workflows - Default: Try Haiku first, escalate to Sonnet if complexity detected

  • Complex operations --> Sonnet or Opus (Pro Plus only, limited for Pro):
  • - Strategic bets, business cases, portfolio tradeoffs - PLT gateway sessions (multi-agent synthesis) - QBR decks, outcome reviews

    Complexity Detection Triggers (auto-escalation):

    User Override: Pro Plus users can force model selection ("use Opus for this"). Free/Pro users cannot override routing.

    COGS Optimization Levers (Priority Order)

    If actual COGS exceeds targets, apply these levers in order:

    PriorityLeverActionCOGS ImpactUX Impact
    1Tighten routingIncrease Haiku % by 10 points-15% COGSMinimal (slight quality difference on edge cases)
    2Prompt cachingCache system prompts, agent personas, common context-20-30% COGSNone (invisible to user)
    3Output length limitingCap responses at 2K tokens for most skills-5-10% COGSMinor (less verbose, potentially better)
    4Reduce Pro Opus accessLower daily limit from 3 to 1, or remove-5% COGSModerate (Pro users lose some premium access)
    5Lower Pro cap5,000 --> 3,500 operationsProportional reductionModerate (forces earlier upgrade decisions)
    6Price increaseRaise Pro from $39 to $49+26% revenue per userRisk: conversion rate decrease

    Recommendation: Start with levers 1-3 (routing, caching, output limiting) before restricting user access or raising prices. These improve margins without degrading the user experience.


    6. Conversion & Retention Strategy

    Free --> Pro Conversion

    Target: 5-10% conversion rate within 90 days of signup

    Primary Conversion Mechanism: ROI Visibility

    The built-in ROI tracking is the most powerful conversion tool. Every skill and agent invocation shows time saved:

    Completed: PRD for authentication feature
    Time saved: ~4 hours (vs. manual PRD writing + stakeholder reviews)

    Session total: 12.5 hours saved this month

    Conversion prompt at cap or ROI threshold:

    "This month you saved 12.5 hours using Product Org OS (500 operations).
    Upgrade to Pro for 5,000 ops/month -- that's 100+ hours saved for $39/mo.
    That's less than $0.40 per hour saved."

    Secondary Conversion Mechanics:

  • Context expiration pressure: Free tier retains context for only 7 days. After a user records decisions, the expiration countdown creates urgency.
  • Model quality discovery: Some operations would benefit from Sonnet/Opus. In-app messaging: "This analysis would be richer with Sonnet. Available on Pro ($39/mo)."
  • Operations pacing indicator: At 50%, 70%, 90% of monthly cap, show usage meter. At 80%: "You're at 400/500 ops with 12 days left. Upgrade to Pro for 10x capacity."
  • Social proof: "Join 150 PMs who upgraded to Pro this month. Average time saved: 15 hours/month."
  • Risk-free trial: "Try Pro free for 14 days. No credit card required." (Consider for launch period only.)
  • Pro --> Pro Plus Upgrade

    Target: 15-20% of Pro users upgrade within 6 months

    Primary Upgrade Trigger: Overage Accumulation

    When Pro users consistently hit their 5,000 op cap, overages create a natural price comparison:

    "Your overages this month: $52 (7,200 operations).
    Pro Plus is $119/mo for unlimited operations.
    At your usage level, Pro Plus saves you $[overage - $80 price difference]/month."

    Secondary Upgrade Triggers:

  • Opus desire: Complex operations (strategic bets, PLT sessions, QBR decks) are dramatically better with Opus. Show quality difference.
  • Context retention: At 85 days, decisions approaching expiration: "Your Q1 pricing decisions expire in 5 days. Pro Plus retains context for 1 year."
  • Speed frustration: During peak hours, Pro users may experience queue delays. Pro Plus guarantees dedicated capacity.
  • Power user recognition: After 3 months of heavy Pro usage (>3,000 ops/mo), personalized email: "You're in our top 10% of users. Pro Plus was designed for PMs like you."
  • Retention Through Context Lock-In

    The context moat is the primary retention mechanism. As users accumulate decisions, bets, assumptions, learnings, and feedback in their context registry, switching cost increases:

    Months of UseEstimated Context ItemsSwitching Cost
    1 month10-20 decisionsLow -- easy to recreate
    3 months50-100 itemsModerate -- significant re-entry effort
    6 months150-300 itemsHigh -- institutional knowledge locked in
    12 months300-600+ itemsVery High -- irreplaceable organizational memory

    Retention tactics by lifecycle stage:

    ROI-Driven Conversion (The Flywheel)

    User invokes skill/agent
      --> ROI displayed ("~4 hrs saved")
      --> Session total accumulates
      --> Weekly email: "You saved 15 hours this month"
      --> Monthly: "You've saved 45 hours in 3 months"
      --> At cap: "Upgrade to save even more"
      --> After upgrade: "Since upgrading, you've saved 120 hours ($4,680 value at $39/hr PM rate)"
    

    This creates a self-reinforcing conversion loop: the more the user engages, the more value they see, the stronger the upgrade signal.


    7. Pricing Alternatives & Recommendations

    Option A: Accessibility Pricing ($29/$99)

    Philosophy: Maximize TAM, compete on price, grow fast

    TierPriceProsCons
    Pro$29/moCompetitive with consumer AI tools; lower barrier to conversion; larger addressable marketZero margin cushion if COGS = $30; forces aggressive COGS optimization; hard to increase later (price anchoring)
    Pro Plus$99/moPsychological "$99" tier; 3.4x Pro pricingMay not cover unlimited operations COGS; thin margin on heavy Opus users

    Financial Implications Framework:

    If 1,000 Pro users, COGS = $28/user:
    Revenue = $29,000/mo
    COGS = $28,000/mo
    Gross Profit = $1,000/mo (3.4% margin)

    If COGS climbs to $31/user (10% overage): Revenue = $29,000/mo COGS = $31,000/mo Gross Profit = -$2,000/mo (LOSS)

    This option works if:

    Risk Assessment: HIGH -- one COGS spike eliminates all margin. No room for error.


    Option B: Margin-First Pricing ($49/$129)

    Philosophy: Protect margins, position as premium, grow sustainably

    TierPriceProsCons
    Pro$49/mo$19 margin cushion if COGS = $30; room for usage growth; sustainable unit economicsHigher barrier to conversion; positions as premium vs. ChatGPT Plus; may limit TAM in price-sensitive segment
    Pro Plus$129/moClear premium positioning; high margin; can absorb heavy usage$80 gap from Pro may feel steep; requires strong differentiation messaging

    Financial Implications Framework:

    If 1,000 Pro users, COGS = $30/user:
    Revenue = $49,000/mo
    COGS = $30,000/mo
    Gross Profit = $19,000/mo (38.8% margin)

    If COGS climbs to $35/user (17% overage): Revenue = $49,000/mo COGS = $35,000/mo Gross Profit = $14,000/mo (28.6% margin -- still viable)

    This option works if:

    Risk Assessment: MODERATE -- margins are healthy but conversion rate risk is real.


    Option C: Hybrid Pricing ($39/$119) -- RECOMMENDED

    Philosophy: Balance accessibility with margin protection. Data-driven adjustment post-launch.

    TierPriceProsCons
    Pro$39/moMore accessible than $49, less risky than $29; $9 margin cushion at $30 COGS; competitive with professional tools; under $40 psychological thresholdThin margin if COGS optimization fails; lower revenue per user than $49
    Pro Plus$119/mo3x Pro pricing (clear value gap); high margin even with heavy Opus usage; "just under $120" threshold$80 gap from Pro may feel large (but unlimited ops + full Opus justifies it)

    Financial Implications Framework:

    If 1,000 Pro users, COGS = $25/user (target):
    Revenue = $39,000/mo
    COGS = $25,000/mo
    Gross Profit = $14,000/mo (35.9% margin)

    If COGS = $30/user (worst case before increase): Revenue = $39,000/mo COGS = $30,000/mo Gross Profit = $9,000/mo (23.1% margin -- thin but viable)

    If COGS = $20/user (post-optimization): Revenue = $39,000/mo COGS = $20,000/mo Gross Profit = $19,000/mo (48.7% margin -- healthy)

    Why Hybrid is Recommended:

  • Reduces risk of launching too low: Can't easily raise prices once anchored. $39 can go up to $49 if needed, but $29 is very hard to raise.
  • Maintains margin viability: Even at worst-case COGS ($30), still generates positive gross margin per user.
  • Provides data-driven adjustment path:
  • - If actual COGS <$25 for 3 consecutive months --> consider lowering to $29/$99 (market expansion) - If actual COGS >$30 for 2 consecutive months --> raise to $49/$129 (margin protection) - If Pro Plus adoption <10% after 6 months --> lower to $99 (accessibility) - If Pro Plus adoption >30% after 6 months --> raise to $149 (premium capture)

  • Competitive positioning: $39 is clearly below PM tools ($50-150+) but clearly above consumer AI ($10-20). It signals "professional tool" without the enterprise friction.

  • Comparison Summary

    MetricOption A ($29/$99)Option B ($49/$129)Option C ($39/$119)
    Pro Margin at $25 COGS13.8%49.0%35.9%
    Pro Margin at $30 COGS-3.4% (LOSS)38.8%23.1%
    Conversion RiskLow (cheap)High (expensive)Medium
    Margin RiskHIGHLowMedium
    Price Increase PathVery hardEasyModerate
    Price Decrease PathN/A (already low)EasyEasy
    FlexibilityLowMediumHIGH

    Recommendation: Launch at Option C ($39/$119). Gather 90 days of COGS data and conversion data. Adjust based on evidence, not assumption.


    8. Future Pricing Evolution

    Team Tier Design (Phase 3 -- Q4 2026)

    Pricing Model: Per-seat + shared context pool

    ElementDesign
    Base price$59/user/month (minimum 5 seats)
    OperationsPooled: 5,000 ops/user/month shared across team (25,000 pool for 5-seat team)
    Model accessAll models (Haiku, Sonnet, Opus)
    ContextShared workspace -- all team members see decisions, bets, feedback
    AdminInvite/remove users, usage analytics per user
    PortfolioCross-product views, multi-product context filtering

    Volume Discounts:

    Rationale for $59/user:

    Enterprise Tier Design (Phase 5 -- Q2 2027)

    Pricing Model: Annual contract value (ACV) based

    ElementDesign
    Starting ACV$15,000/year (10-seat minimum)
    OperationsUnlimited (no caps, no fair use)
    Model accessAll models + priority routing
    ContextUnlimited storage, unlimited retention
    SecuritySSO (SAML, Okta, Azure AD), RBAC, audit logs
    SupportDedicated CSM, <4hr SLA, implementation support
    DeploymentShared instance (standard), dedicated instance (premium)

    ACV Frameworks by Company Size:

    Volume Discounts:

    Price Increase Strategy

    Grandfathering Policy: Existing users maintain their price for 12 months after any increase. After 12 months, prices adjust to current rates.

    Increase Triggers:

    Increase Protocol:
  • 90-day advance notice via email
  • Offer annual lock-in at current price (creates annual commitment)
  • Never increase more than 30% in a single adjustment
  • Never increase more frequently than once per 12 months
  • International Pricing Considerations

    Phase 1 (Launch): Single global price in USD. Simple, no complexity.

    Phase 2 (M6-12): Consider purchasing power parity (PPP) for key markets:

    Phase 3 (M12+): Local currency pricing for top 5 markets:

    9. Implementation Plan

    Launch Pricing Decisions Needed (Before Launch)

    DecisionOptionsDeadlineOwnerDependencies
    Final Pro price$29, $39, or $49POC exit (Week 6)BizOps + PLTWTP data from POC users
    Final Pro Plus price$99, $119, or $129POC exit (Week 6)BizOps + PLTPro price decision
    Free tier operations cap300, 500, or 750Phase 1 startPM + BizOpsCOGS per Free user data
    Pro tier operations cap3,000, 5,000, or 7,500Phase 1 startPM + BizOpsCOGS per Pro user data
    Overage billing: hard cap vs overagesHard cap or tiered overagesPhase 1 startPM + BizOpsEngineering feasibility
    Annual discount15%, 20%, or 25%Phase 1 startBizOpsChurn projections
    Launch promotionNone, 30% off first 3mo, or 14-day free trialLaunch dayPMM + BizOpsConversion rate targets

    A/B Testing Plan

    Test 1: Price Point (POC Period)

    Test 2: Free Tier Cap (Phase 1, Month 1-2) Test 3: Upgrade Messaging (Phase 1, Month 2-4) - A: ROI-focused ("You saved 12 hours. Pro = $3.25/hour saved") - B: Scarcity-focused ("You've used 450/500 ops. Upgrade for 10x") - C: Quality-focused ("Get Sonnet and Opus for deeper analysis") Test 4: Annual vs Monthly (Phase 1, Month 3-6)

    90-Day Validation Metrics

    Track daily during first 90 days:

    MetricTargetRed FlagAction if Red Flag
    Pro COGS/user<$25>$30Tighten model routing (Lever 1)
    Model mix (Pro)70/25/5 H/S/OOpus >10%Reduce daily Opus limit
    Avg ops/Pro user2,000-3,500>4,000Monitor; may need to lower cap
    Free-to-Pro conversion5-10%<3%A/B test upgrade messaging and Free tier limits
    Pro-to-Pro Plus conversion15% (6mo)<5% (3mo)Lower Pro Plus price or add value
    Monthly churn (Pro)<5%>7%Investigate: onboarding? value? competitor?
    Free user COGS<$5/user>$8/userLower Free cap from 500 to 300
    Overage revenue/Pro user$5-10<$1Users not hitting cap; may lower cap to drive upgrade

    Adjustment Triggers and Protocol

    TriggerConditionActionTimeline
    COGS too highPro COGS >$30 for 2 consecutive monthsRaise Pro to $49 OR tighten routingImplement within 30 days
    COGS comfortablePro COGS <$20 for 3 consecutive monthsConsider lowering to $29 (market expansion)Evaluate at quarterly review
    Conversion too lowFree-to-Pro <3% for 90 daysLower Free cap OR add Pro trial OR lower priceA/B test within 2 weeks
    Conversion very highFree-to-Pro >15% for 60 daysConsider raising price (headroom exists)Evaluate at quarterly review
    Pro Plus underperformingPro Plus adoption <10% after 6 monthsLower from $119 to $99Implement at next billing cycle
    Pro Plus overperformingPro Plus adoption >30% after 6 monthsConsider raising to $149Evaluate at quarterly review
    Churn crisisPro churn >8% for 2 consecutive monthsInvestigate root cause; consider annual discount or feature investmentEmergency response within 1 week


    10. Appendices

    A. COGS Calculation Frameworks

    Framework 1: Blended COGS per Operation

    Input:
    
    • Haiku cost per op: $[TBD]
    • Sonnet cost per op: $[TBD]
    • Opus cost per op: $[TBD]
    • Model mix (H/S/O): [70/25/5] for Pro, [40/40/20] for Pro Plus
    Output: Pro Blended Cost = (0.70 x Haiku) + (0.25 x Sonnet) + (0.05 x Opus) Pro Plus Blended Cost = (0.40 x Haiku) + (0.40 x Sonnet) + (0.20 x Opus)

    Framework 2: Monthly COGS per User

    Input:
    
    • Avg operations/user/month: [TBD]
    • Blended cost per op: $[calculated above]
    Output: Monthly COGS = Avg Ops x Blended Cost

    Framework 3: Margin Sensitivity

    At $39 Pro price:
    
    • COGS $15/user --> 61.5% margin (excellent)
    • COGS $20/user --> 48.7% margin (good)
    • COGS $25/user --> 35.9% margin (acceptable)
    • COGS $30/user --> 23.1% margin (minimum viable)
    • COGS $35/user --> 10.3% margin (REQUIRES ACTION)
    • COGS $40/user --> -2.6% margin (LOSS - raise price or cut costs)

    B. Competitive Pricing Benchmarks

    ProductFree TierIndividualTeamEnterpriseValue Metric
    Legionis$0 (500 ops)$39-119/mo$59/user/mo$15K+/yrOperations
    ChatGPT PlusFree tier$20/mo$25-30/user/moCustomMessages
    Claude ProFree tier$20/mo$30/user/moCustomUsage-based
    GitHub CopilotFree tier$10/mo$19/user/mo$39/user/moPer seat
    Cursor ProFree tier$20/moN/ACustomFast requests
    Notion AIFree tier$10/mo$15/user/moCustomPer seat
    ProductboardTrial$25+/user/mo$60+/user/moCustomPer seat
    Aha!Trial$59/user/mo$79+/user/moCustomPer seat
    ConfluenceFree (10 users)$6/user/mo$11/user/moCustomPer seat
    LinearFree tier$8/user/mo$16/user/moCustomPer seat

    Positioning Insight: At $39/mo, we are:

    C. Pricing Page Wireframe Suggestions

    Layout: 3-column comparison (Free | Pro | Pro Plus), with Team and Enterprise as separate section below.

    Key Elements per Tier Card:

  • Tier name + price (large, prominent)
  • Operations cap (primary differentiator)
  • Model access badges (Haiku | Sonnet | Opus)
  • 5-6 feature bullets (checkmarks/x-marks for comparison)
  • CTA button ("Start Free" / "Upgrade to Pro" / "Go Unlimited")
  • Psychological Pricing Tactics:

    Above the fold:

    D. Revenue Model by Pricing Scenario (Per 10,000 Total Users)

    Assumptions: 70% Free, 25% Pro, 5% Pro Plus

    ScenarioFree UsersPro UsersPro Plus UsersMonthly RevenueAnnual Revenue
    Option A ($29/$99)7,0002,500500$122,000$1,464,000
    Option B ($49/$129)7,0002,500500$187,000$2,244,000
    Option C ($39/$119)7,0002,500500$157,000$1,884,000

    Revenue Delta: Option C generates $420K more ARR than Option A, and $360K less than Option B. The $420K additional revenue over Option A is worth the marginal conversion risk.

    E. Glossary

    TermDefinition
    OperationSingle skill invocation, agent spawn, or gateway session that consumes Claude API tokens
    COGSCost of Goods Sold -- primarily API costs for model inference
    Blended CostWeighted average cost across multiple models (Haiku, Sonnet, Opus)
    Fair UsePolicy preventing abuse of "unlimited" tier, enforced via soft caps
    Model GatingRestricting model access by tier (Haiku-only for Free, etc.)
    Intelligent RoutingAutomatic model selection based on operation complexity
    OverageUsage exceeding tier allocation, billed per-operation (Pro tier only)
    Context RetentionDuration that decisions, bets, and learnings remain in the registry
    Value MetricThe unit by which pricing is measured (operations, seats, storage, etc.)
    WTPWillingness to Pay -- the price range customers accept for a product
    PPPPurchasing Power Parity -- adjusting prices for local economic conditions
    ACVAnnual Contract Value -- total annual revenue from an enterprise contract


    Document Control

    Version: 2.0 Last Updated: 2026-02-18 Owner: BizOps Next Review: After POC completion (Week 6) -- pricing decisions finalized Distribution: Product Leadership Team, BizOps, PMM

    Related Documents:

    Change Log:

    End of Document