Definition
Consumption Pricing
A pricing model in which customers pay based on actual usage rather than seats or licenses. Forces the vendor to care about adoption velocity and ongoing engagement — because revenue scales with real usage, not contract value. When Knapsack moved to consumption pricing, time-to-value became the primary commercial driver: the faster a customer gets value, the faster they consume more, the faster revenue grows. Aligns vendor and customer incentives in a way seat-based pricing does not.
From the episode “Stop Designing Screens, Start Designing Patterns”Hear it on the podcast1 episode
Learn the language of AI-native founders
Every week: the new terms, tools, and workflows founders are using, straight from the podcast.
Related terms in Growth, Sales & Marketing
Cohort retentionWhat percentage of users who joined in a given period are still active later. The QR code app held 20% at year five, which is exceptional.Collaborative Results Index (CRI)Geoff Gibbins' framework for measuring the quality of human-AI collaboration across three dimensions: (1) results — the actual impact of the collaboration, not just activity or usage; (2) relationship quality — how well humans engage with AI as a collaborator, including critical thinking, good question formation, and not passively accepting first outputs; (3) resilience — whether the human is developing domain expertise through the collaboration or outsourcing judgment and atrophying. Most enterprise AI measurement stops at usage metrics; the CRI measures whether collaboration is making people genuinely better.CollectionA curated subset of files indexed for AI interrogation.Competitive intelligence reportStructured analysis of your market position against named competitors, including adjacent entrants you aren't currently watching.Content derivativesThe many formats, short video, long post, thread, spun from one core idea.Content engineA system that publishes useful content on a schedule to attract clients.Content spineThe core argument of a piece, captured in the creator's own words, that all formats are built from.Creative fatigueWhen an ad's performance decays from overexposure. Cost per acquisition rising over consecutive days is the tell.