Best Feature Killing Revenue? How to Fix Your Monetization

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Welcome to the 205th edition of The Growth Elements Newsletter. Every Monday and sometimes on Thursday, I write an essay on growth metrics & experiments and business case studies.

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Here is the uncomfortable truth about AI in SaaS right now.

The better your product gets at making users efficient, the fewer seats your customers need.

And if your entire revenue model is built on per-seat pricing, your best feature is actively shrinking your revenue.

[1] The Per-Seat Collapse Is Already Happening

In Q4 2025, multiple public SaaS companies reported slowing growth. Not because AI failed, but because it worked too well.

When one AI-equipped user can do the work of five, customers do not buy more seats. They cut them.

• Roughly $2 trillion in market capitalisation evaporated from software companies in early 2026

• Investors are no longer funding generic productivity tools, basic CRM clones, or thin AI wrappers

• Customers are actively calculating how many licences to eliminate next renewal

[2] Why Most Operators Are Ignoring This

Per-seat pricing feels safe because it scales with headcount. But that assumption breaks when AI reverses the headcount curve.

• Your expansion revenue depends on customers hiring more people

• AI lets companies do more with smaller teams

• The result: net revenue retention drops even when customers love your product

This is not a theoretical risk. Forrester labelled it the "SaaSpocalypse" and projected that half of the SaaS industry would face disruption from this dynamic.

[3] What Smart Operators Are Doing Instead

The companies that survive this shift are repricing based on value delivered, not on people served.

• Usage-based pricing ties revenue to actual product consumption

• Outcome-based pricing charges for results, not access

• Platform plays with data moats make switching costs real, not imaginary

Vertical SaaS companies with deep domain data are projected to grow from $133B in 2025 to $194B by 2029 because their value is not replaceable by a generic AI agent.

Final Words

[1] Audit what percentage of your revenue depends purely on seat count. If it is above 70%, start modelling alternatives now.

[2] Talk to your top 10 customers this month about how AI is changing their team size and what pricing would keep them expanding with you.

[3] Identify one product metric that reflects value delivered rather than seats occupied, and start tracking it as your north star.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria