Orb allows businesses to implement dynamic pricing models such as usage-based and hybrid systems, empowering companies like Vercel, Pinecone, and Perplexity to evolve their revenue strategies with ease.
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In this episode of Greymatter, Greylock partner Saam Motamedi chats with Alvaro Morales, CEO and co-founder of Orb, a cutting-edge billing infrastructure platform designed for the next wave of SaaS and AI companies.
Morales highlights how Orb’s flexibility transforms revenue workflows, especially in industries like AI and cloud infrastructure, by allowing businesses to shift pricing models without extensive re-engineering. He notes, “Pricing is about as customer-centric and product-centric as you get.” – and goes on to explain that it’s about understanding what value you provide to your customers and how to best meet them.
Focus on Innovation, Not Billing
Orb’s founding story stems from the experiences Morales and his-co-founder Kshitij Grover faced firsthand at Asana, including the challenges of rigid pricing systems, which often took months to update. Orb was built to provide a flexible, developer-first platform that not only powers billing but also enables companies to focus on product innovation instead of the complexities of billing. Morales quips: “These [product] changes sound simple, they are simple. You’re adding a feature to a tier, changing pricing—this is not rocket science.”
Unfortunately, the approach the industry has taken until now has made it very difficult to flexibly change pricing. The flexibility Orb offers is becoming increasingly mission-critical as companies across industries need to adapt quickly to new market demands, particularly with the rise of AI and more sophisticated business models.
Ship Pricing as Fast as Product
With their latest funding round, a $25 million Series B, Morales outlines Orb’s future focus on enabling companies to adopt flexible and scalable monetization strategies. He predicts a significant shift toward outcome-based pricing models, especially in AI-driven industries. Morales believes Orb will play a crucial role in helping businesses innovate faster by removing the bottlenecks in traditional billing processes.
As the software industry continues to evolve, Orb aims to be the foundation that allows companies to iterate and grow efficiently, aligning their revenue models with customer value by helping reduce this innovation tax that holds companies back.
“I want Orb to be known for enabling companies to ship their pricing as quickly as they’ve shipped their products.”
Transcript
Saam Motamedi:
Hi, and welcome to Greymatter, the podcast from Greylock. I’m enterprise partner, Saam Motamedi, and today I’m joined by Alvaro Morales, the CEO and co-founder of Orb. Orb is the modern billing infrastructure powering revenue workflows for the next wave of AI and software companies — companies like Vercel, Pinecone, and Perplexity. And they’ve just raised a $25 million series B from investors, including Greylock. If you prefer to read this interview, rather than listen to it, you can find a link to a full transcript in the episode description. There’s also a video version on YouTube.
Alvaro, welcome to Greymatter. It’s so good to see you. For listeners who haven’t heard of Orb before, let’s start with just giving them the elevator pitch. What is Orb and what makes the company so special?
Alvaro Morales:
Sure thing. Thank you for having me, Saam. I’m excited for this conversation. So Orb is flexible billing infrastructure for modern pricing software models. So if you think about it, we help software businesses experiment with different kinds of monetization strategies, whether this is usage-based pricing, consumption-based pricing, or more of a hybrid strategy, mixing together seat-based and consumption. And really the goal of Orb is to make it really easy for companies to evolve their pricing. I think one thing that’s unique about what we do here is that when you think about when a company’s pricing model changes, the billing infrastructure needs to change, and that’s where a lot of our software solution is geared towards. But a lot of other things in a company need to change. So everything from how a finance team thinks about the financial health of the business, how they do revenue accounting, how they do forecasting, how many go-to-market teams think about their workflows. So really what we’re doing with Orb is we’re excited to support companies in the mission-critical areas of revenue workflows with what they do.
Saam Motamedi:
Awesome. And completely agree with you on the sort of reengineering of the business that happens around these pricing changes and the power of Orb to help power a lot of that change. What sort of companies have you found get the most out of using Orb?
Alvaro Morales:
Yeah, when you think about the broader trend that’s going on in software, it’s kind of fitting this early adoption market curve pattern. So a lot of the customers that we serve right now are in verticals such as cloud infrastructure, data, AI, fintech. Think about the kind of software companies that have the most sophisticated business models out there. And the thing about those companies is they could go and put a ton of engineering investment focus in billing, or they could put that time and effort into building their core products. So a lot of what we do with Orb is we power billing for them and give them a lot of flexibility to evolve what they’re doing without them having to put their team towards that.
Saam Motamedi:
Awesome. Well, we’re going to talk a lot more about what Orb is doing today, but I want to rewind the clock a little bit and sort of share with our listeners some of the history here. So let’s rewind to 2021. You started Orb with your co-founder Kshitij, your co-founder and CTO. And the two of you’ve known each other for a long time, right? Dating back to Asana where you worked closely together and built that company through its IPO. Maybe tell the story of how you guys got together and how you realized that this was the problem to go after solving.
Alvaro Morales:
Yeah, so Kshitij and I met at Asana when we joined pretty early on the team there, and we’ve been friends for a long time and both of our backgrounds is in software engineering. So I knew nothing about pricing or billing going into that job. In fact, I remember that when I got asked to support a price change happening early on, I saw that there was a meeting with the finance team and I thought, “Great, I’m going to walk into this and look at a bunch of Excel math and models and write three lines of code and move on with my life and that’ll be the end of it.” Well, in many ways that didn’t end up being the case. I think one thing that was eye opening there was coming to the realization that pricing is about as customer-centric and product-centric as you get. It’s about understanding what value you provide to your customers and how to best meet them.
And it’s really an exercise of business strategy. So that way of thinking, I think, really jived and connected with my engineering brain and got me excited to think about here’s the impact that it can have on our customers and our business. But then, unfortunately, it took us many months to shift a very simple per-seat pricing model or roll out a different tier. Interestingly, those kinds of initiatives were also pretty significantly revenue impacting to the company. So I’m looking at that situation. It has this mix of a ton of pain on engineering and finance, some really significant revenue impact. I found it really uncomfortable to be one of the engineering voices in the room having to tell no to business teams on, “Fantastic idea, but it’s going to take me six to eight months to re-architect and refactor every assumption we’ve made around pricing in the business.”
So I think Kshitij and I really connected on that idea, which was it’s kind of counterintuitive that this essence of a developer platform — that is, the ideas around extensibility, flexibility, iteration — haven’t made it to the revenue stack, haven’t made it to the design of a billing infrastructure system. And what an amazing fit when you think about the kind of software monetization models that Orb is built to support with the kind of flexibility that Orb has as a platform. So I think what was really interesting was almost like infusing our engineering DNA and the perspective and outlook that we have as engineers into a space that’s as cross-functional you get. At the end of the day it’s finance teams that have to close books and report guidance for a company and whatnot, and our system is kind of a key component towards that process.
Saam Motamedi:
Yeah, I remember when we first met and you shared the story of what it took to make that pricing change happen at Asana. I could just feel the pain, and thank god you guys built Orb, so no other teams have to deal with that pain firsthand. Orb can handle it all for them.
Alvaro Morales:
Absolutely. Right, because when you think about it, particularly the kind of business stakeholders that my teams often worked with, these changes sound simple. They are simple. You’re adding a feature to a tier, you’re changing a tier, you’re changing a pricing model. This is not rocket science, but unfortunately this approach that the industry has taken to date — where product engineering teams have to deeply embed and hard code and understand the constraints of current pricing today — has kind of resulted in us having to just be very stagnant with how pricing evolves. And look, these are very smart individuals, very smart teams thinking about what’s in the future outlook of the business. But let me tell you what makes this domain so challenging to go solve. Well, if you think about it, somebody at the company puts together a list of product requirements. Here’s what our pricing is today, here’s some ways that we know that this could evolve. And then three months happen and the business completely shifts direction, or there’s something that happens in the market, or there’s a new product to go change. So whatever set of requirements you thought you were building towards just changed out from under you. That’s why I think when you think about a solution like Orb that has a broad purview across many different types of customers, many different types of monetization models, I think we’re structured a little bit more well equipped to go solve that problem holistically.
Saam Motamedi:
Yeah, absolutely. So maybe fast forwarding to where we are now, and a lot has happened in the last three years since you guys started on this mission. So Orb raised a $14 million series A just last year. Now, congratulations on raising your $25 million series B. Tell us about the round. What does the series B mean for Orb, and what’s kind of your plan and focus with this new round of funding?
Alvaro Morales:
Yeah, it’s a really exciting time for the team and at the company. I think this round is falling out of the timing and relevance and what we’re doing. I mean, we’re really building a business off of what I think is going to be one of the most important and disruptive trends in software — that is, the fundamental way that value is delivered in software has the potential to change, particularly with a lot of the innovations that we’re seeing in AI. And that’s coupled together with also a very challenging macroeconomic environment for software. A lot of software businesses that had been growing amazingly through head count growth really saw a massive deceleration that for some companies is a little bit existential. So on this confluence of trends, I think what we’re seeing is a really significant acceleration in demand for the kind of flexible monetization that Orb is built to support. So just in the past year, we’ve seen over 5x revenue growth, and since the beginning of the year we’ve tripled our customer base. I think that’s a reflection of some of this momentum that we’re really seeing. So I’m deeply excited that this fundraising round really represents an ability to continue investing in our product, continue investing in our team to just meet more and more of these customers and really show them that there’s a different way and a better way to think about their monetization infrastructure.
Saam Motamedi:
One of the things, Alvaro, you and I talk about is at any given moment in time, there’s one or two trends that really are dominating the software industry. And I think one of the things you’ve talked about and built the company around is the secular shift that’s happening in software pricing and how Orb plays into that. And so let’s talk a little bit about that because I think it’s something every founder and team is thinking about. Maybe to start, can you break down why you think consumption-based pricing is the future, and how did we get here? What’s driving the shift towards consumption?
Alvaro Morales:
So maybe I can even rewind back to a little bit of what we were seeing in 2021 when we started the company. So we were seeing some very successful trailblazing public companies like Snowflake and Twilio lead the education of the public markets around, “Here are the advantages of a consumption-based revenue model in its ability to drive astounding, best-in-class net dollar retention and really efficient growth as a business.” So public markets often require these waves of companies to get educated around how do I think through what these businesses are. SaaS very much was a shift in the sense that it took a while for the public markets to really figure out how to value and underwrite SaaS-based public companies. And I think we were starting to see a similar thing and trend happen in the public markets with some of the most trailblazing and successful consumption-based companies.
And those companies, I think, were leading the charge on two very important things. Number one was best-in-class products that themselves had found a very successful flywheel in strong product market fit, strong product adoption that kept growing and growing in value. If you think about it as a consumer, consumption-based pricing is really around this idea of how do we avoid the shelfware or how do I avoid paying for that gym subscription that I pay for but don’t go for and really only pay for what I consume? It’s a more fair model, it’s a line to value. If I’m not using it, I’m not paying for it. If I’m using it, I’m paying and continuing to pay more. I think that’s very bold and courageous. I mean, you need an amazing product and a ton of confidence in your product, really stand behind it and tie your revenue growth strategy towards that.
But I think those companies were showing us that that was happening. And I think number two, the efficiency of that was amazing. Around Snowflake’s IPO, $1 of revenue acquired could become $1.60 in a matter of a year and that kept having a tremendous revenue potential. So we were seeing in 2021 a lot more of software, particularly in the infrastructure layer, realizing the capabilities and powers of aligning your value to the value the customer receives. Now, I think what changed was two of the things that I mentioned there. You saw a very challenging macroeconomic environment for software, where it didn’t matter how amazing your product was, if you charge based on seats and your customer did a massive downsizing, didn’t matter how great your product or service was, they were going to downsize that contract. And then second, sort of this wave of AI has exploded and we’re not that many months from the original launch of ChatGPT, but we’re continuing to see on a daily basis some amazing innovation there.
And I think that wave is compounding together with some of the macro environment. And here’s something that I’ve been thinking a lot about. When you think about platform shifts in the software industry, every major one has not only resulted in just a generation of companies providing significant innovation, it’s also disrupted the software business model. So you think about back to the PC era, that’s where license-based pricing and the real conviction that the marginal cost of deploying software by printing out the next CD ROM and installing it became a really attractive investment model. Well, early cloud that coincides with the SaaS-based business model. I think gen AI has the potential to shifting the value of software away from “Do I have a login to a web product that I have access to” into more of an outcome-based orientation. Like what can this agentic software do for me? What results can it achieve? Can I measure what results it’s seeking to achieve? So I think there’s something really unique about the potential to disrupt not just the innovation of software but also the monetization of software. So when I think about what’s to come, honest answer is we don’t exactly know. But I think there’s a ton of change in the ecosystem, and I’m really excited about the role that Orb can play in this.
Saam Motamedi:
Yeah, a lot of what you just said resonates with me. I remember back in ’21 we were talking about Snowflake and Twilio and in the private markets companies like Databricks, and there were a few really great examples of why consumption-based is great for you as a business and great for your customers because it aligns the pricing model with the value that’s being delivered. But when you fast forward to 2024, and to your point now squarely in the generative AI era, I feel like there are very few companies that do not have consumption, at least as a part of the way they think about pricing. And we have a lot of founders who listen to this show. What are your learnings having worked with a lot of these AI companies, how should people think about pricing around AI? How should they think about monetizing AI? Why is seat-based not as good of a fit, it seems, for these AI and agentic companies?
Alvaro Morales:
Yeah, I think at a high level… we work with a lot of AI companies at Orb, and I think it’s a real passion of mine to work with founders on their pricing strategies. One thing that we have observed and we’ve been noticing is the nature of AI businesses from one being very innovative and new and tapping new budgets in enterprises, but second, also being fairly costly to run from a cost of goods sold perspective. The cost of running AI infrastructure is not a small bill. So what we’re observing is that founders are thinking about their pricing strategy much earlier in the company-building journey than they otherwise would’ve had to. Now I think that’s actually a really great thing. It’s a great thing for the ecosystem. It means that we can build stronger and more efficient businesses from the get-go. And actually there are some interesting considerations with pricing in AI, but by and large, I think I’d like to start by saying AI pricing is just great pricing strategy and goes back to the fundamentals.
So there it’s really about one, can you keep it simple? At the end of the day, whatever pricing strategy you come up with can’t live in an Excel model math spreadsheet. It needs to be communicated to a customer in a sales-oriented conversation. So it needs to be simple, understandable, and aligned. Second, I think you should be aware of your cost structures. You should have an understanding of what drives your costs, what’s your margin profile. When it comes to value-based pricing, you rarely want to directly tie your pricing strategy to your cost structure, but particularly when that OpenAI or Anthropic bill is so high, you want to have some awareness and understanding of where directionally that is headed. And then I think number three, it’s about flexibility and iteration. You’re not going to get it right in the get-go. You have to try out some things, learn in the market, and evolve from there. So when you think about that, one, really tying to value. Second, it’s understanding of margins. And third, it’s about testing various pricing strategies. There’s very little AI to do there and much more about how do we build great software pricing models.
Saam Motamedi:
Yeah, that was some really good learnings and advice from the customers that you’ve partnered with and the role AI is having on how they think about pricing. Maybe one question, do I as a customer need to be usage based or fully switch to usage based to be a good fit for you at Orb?
Alvaro Morales:
No. And actually if you think about it, there are many businesses for which a pure-play pay-as-you-go consumption model is just not a great fit. And that’s because… I think I shared this a little bit when I was telling you about my experience into this world: I used to think that pricing was about math. It’s not about math. It’s about understanding the specifics of your customers in your market, which means that maybe more of a seats plus consumption hybrid strategy might be better for you. Or maybe it’s like you use usage-based limits in your feature tiering to drive upsells through what you’re doing. I think the common denominator in all of this, though, is flexibility. I think too many existing approaches to billing just rely on pricing as a one and done. You set it and forget it, and you miss on the fact that you have to keep evolving it. So I think to be a great fit for Orb, you as an organization, I think you need to be seeking more flexibility in your monetization. And I think that’s something that every software company today and tomorrow is going to need to really stay competitive, evolve, and get more efficient.
Saam Motamedi:
I want to move to the sort of billing landscape, but before we do that, I have one more question just around pricing and pricing themes. Based on your vantage point working with a lot of these leading companies, you get to see around the corner on what are the most innovative people doing around pricing. And so I want to ask you to now fast forward three years into the future, what’s coming? What sort of trend should we expect to see in the world of pricing over the next several years?
Alvaro Morales:
I am deeply fascinated about the early experimentation that we’re doing as an industry around an outcome-based pricing model. Let me get a little bit mathematical here. If you think about a hypothetical value curve where you’re charting out the true value that a software solution is delivering to a customer, its ROI and whatnot, pricing strategy is about trying to approximate that curve as much as you can. And there’s a few ways that you can do it. You can think about it as license-based pricing where you’re trying to just draw a line somewhere and say, “My approximation of value is a particular cost for a license.” Seat-based, try to make it a little bit more of a closer approximation where maybe you’re approximating based on the number of seats that you’re provisioning, what that value is. But at the end of the day, you’re still kind of chasing around this idea of this is the ROI that I get out of software.
The idea behind outcome-based pricing is what if you price based on a measurable outcome that you are seeking to get out of a software solution? I think we’ve seen some really interesting early experiments around this, particularly around the customer service help desk software space. So solutions like Zendesk AI have a way for an agent that’s answering a question on behalf of a customer. You can, at the end of that interaction, ask the customer, did you get your question answered or do I need to kick you up to somebody else? If that customer marks that question as resolved, that is an outcome. So solutions like Zendesk AI are seeking to price based on that outcome. And one thing that I think is going to be really interesting is thinking about a pay-for-performance type strategy that perhaps we saw in ad pricing and ad campaign.
So if you think about it, marketing campaign at Orb, we are setting aside a budget and that budget is a proxy for the kind of results that we want to get out of this campaign. I’m going to put $10,000 towards this campaign because I’m expecting to get some sort of return against lead generation. If I put less budget, I expect less performance. If I put more budget, more results. I think we’re perhaps going to start seeing software adopt a similar model where maybe you can pay less and you get a little bit less of a sophisticated foundation model or a less sophisticated agent to run your task. You can pay more and you can get higher results. So I don’t know, perhaps we’re going to kind of start thinking about value delivered as a lot more granular and tied to budgets than we are right now.
I think another thing that I just want to add in this space is to give the audience a little bit of a sense of how quickly this is changing. I saw a tweet from Jamin Ball on Twitter last week that was really interesting to me. So since the launch of the GPT-4 model family of OpenAI, the price per token has dropped over nearly 90 percent since its release. So if you think about less than 12 months ago, as an AI company leaning on OpenAI’s models, you’re trying to come up with a monetization structure based on those cost models. And months in, it’s dropped nearly 90 percent. I think in that example, Jamin also showed how the cost of S3 on AWS has dropped 97 percent since 2013. So think about that massive… That’s opening up a whole new set of business models that were before not even possible. But that timeline is not happening in 11 years, it’s happening in months, and that’s the ecosystem that we’re living in today. It’s one that’s just evolving way faster than any of us would’ve expected.
Saam Motamedi:
I love those examples. It feels like just zooming up, the point you’re making is we’re on this arc dating back to the PC era to now where we are with the AI era and outcome-based pricing to get pricing to be as close as possible to actual value delivery and recognition. And that’s just a really good arc for us to be on as an ecosystem. And then that arc requires really fast iteration experimentation and sort of dynamic data-driven pricing, and it feels impossible to do without a platform like Orb.
Alvaro Morales:
That’s the thing. I mean, honestly, I don’t think it’s hyperbolic to say if the industry is changing that fast and your engineering team, much like me, is going to tell you it’s going to take a year to shift pricing, maybe you’re not going to stand up to the competition.
Saam Motamedi:
Yeah. So Alvaro, you guys are not the first people to build a billing company. Billing is a tried and true category, important category of software, maybe one of the most since it’s what truly powers businesses. Let’s talk a little bit about the landscape. I’m curious, when you talk to customers, what do people tell you about their existing, more traditional solutions and what sort of pain points do they share with you?
Alvaro Morales:
I think the overall blocker and pain point here is lack of flexibility and agility. So I’m up against a new product launch, an important price change, or 10x significant growth that’s breaking everything that we have in place. And the billing vendor or billing infrastructure I have in place is just not built for the evolution and change that I’m expecting it to. So specifically, it’s either built really around this idea of a more subscription seat model that just does not jive with the kind of more flexibility that a consumption or usage-based pricing model requires. And/or it might support the pricing from yesterday, but now I’m going in a different direction. I get no help to actually make that shift. At the end of the day, I have contracts and customers with rolling start dates on old pricing models, and if I want to change how I’m doing business, I’m going to have to run some price changes and get customers over to new pricing.
That’s really hard. And I’d say that the fundamental gap here is that a lot of previous approaches to billing focused on just the automation piece of the value delivered. There’s a manual invoicing process that somebody on the finance team would have to one by one issue invoices to customers. So software comes in and we’re going to automate that and make it take way less time and be more precise. That’s great. But when you think about the life cycle of a company, pricing evolution is often not considered. So I think we saw these pain points, we saw these problems at our previous company. When founding Orb, we started with what would it look like to build an extensibility-first billing system. One that is designed not just to be possible to represent new and different kinds of monetization strategies but actually help you get there, make it really possible and easy to get there.
So when I think about some of the results that we’ve driven for our customers, I’m super proud. We helped the Vercel team launch billing for v0, their generative UI product. We helped the Pinecone team launch billing for Serverless, their sort of innovative architecture towards the vector database space. We have many results like that. And at the end of the day, I think that’s what we’re here for, which is how can we make things happen for our customers without billing getting in the way. We’re more than happy to take that problem from their hands.
Saam Motamedi:
I’m curious, when you have these conversations and people talk about these pain points that they have from some of the more legacy vendors, how do they compare you to some of the large incumbents out there ranging from a Stripe to a Zuora? And it feels a little bit like a David and Goliath story, so I’m curious how you navigate that.
Alvaro Morales:
I think it is. I think one thing that I’ve come to admire over and over again is as an entrepreneur, as a technologist, I thought this business was really about kind of innovative technology and it is. But more and more, we find that it’s kind of table stakes to have a best-in-class innovative product. And what enterprises are looking for is a partner to help them get from point A to point B and do so in a way that’s best practices oriented and that sets them up for success. So I think when you think about the landscape, Orb stands out, number one, being very native to the kind of monetization models that are needed today. So you’re not going to find a very static subscription or widget-based pricing approach to our features. It’s really oriented around the flexibility that our customers need. Two, it’s very developer first.
It’s oriented around how can we get you to value quickly, help you have a fast implementation and enable change from you. And then thirdly, I think this is part of the special sauce of the company. What we’re really building is a data platform that can uniquely connect every unit of product usage to revenue. And when you think about that kind of end-to-end system, it’s immediately useful for billing. And what we’ve done with a lot of our customers is enabled some of their complex billing needs through our platform, but it’s also immensely powerful for finance. When you think about how do I view the health of my business? I need to have an ongoing, real-time view of my revenue. And that’s something that we’re uniquely able to do because from a data perspective, our system has that closed loop between product usage and revenue.
Saam Motamedi:
Let’s talk a little bit more about Orb the company and Orb the team. Tell me about the team and the team that you all have built.
Alvaro Morales:
I think we have an amazing team, and I’m really proud of the team that we’ve built and are building together. Out of all the things you can work on, it’s worth asking why would somebody choose to work on billing, right? It’s not going to be the flashiest or the most headline-filling areas to work on, but I think the team at Orb brings a uniquely infrastructural lens to the outcomes that they drive for customers. What I mean by that, it’s like we’re not front and center necessarily, but we’re enabling others to achieve their results better and faster.
We have four core values as a company. One is customer centricity. So one thing that I find amazing is how everybody at the company is really excited and eager to jump in, get on the phone with customers and help drive outcomes for them. In a previous life, one of the roles that I had was in growth engineering and my customers were these numbers on a spreadsheet that would go up and down as we ran different metrics and experiments. Contrast that to Orb where we have shared Slack channels with our customers. I’ve been building relationships with them for over three years and know them well. I think customers are at the heart of what we do. Second, this is a little bit of an ode to billing. Minutes matter is one of our values. We think that it’s not only important to drive to a quality outcome, but it’s important to do it quickly.
And I think that compared to maybe some legacy players in the space, what we’re able to achieve in the timeline that we’re able to achieve is kind of unique. There’s an element of ownership and attention to detail that are important. At the end of the day, we work on billing where it comes down to literal dollars and cents on the accounting side. There are people that can go to jail if their accounting is not controlled and correct. If we get our systems wrong, we can charge customers incorrectly. So again, that attention to detail I think is a little bit important. So I find that we’ve put together a unique crew that really models and cares about these areas.
Saam Motamedi:
And I think billing is one of these problems where the more you think about it, the more you peel back the layers of the onion, you realize how big of a problem it is and how critical it is to companies. A little bit of an analogy when you first explained it to me is to Shopify. When Shopify got started, it’s like, okay, cool, yeah, you helped me put up a web storefront. Useful. But it turns out Shopify becomes the operating system in which you run your business. That’s why it’s a $90 billion company with the impact that it has today. And sort of similarly with billing, when you think about billing as an infrastructure problem and you think about all the downstream go-to-market functions that are built on a foundation of pricing and billing, you realize that getting it right sort of becomes the operating system for our customers. And there’s so much to then go build on top of that sort of database foundation. It’s actually one of the most interesting things you could go work on, but it requires a little peeling of the onion.
Alvaro Morales:
Absolutely is. And to that point, I mean our product today has some really rich capabilities around revenue reporting. So how do we help finance teams close the books? We’re going to continue working on areas like revenue forecasting where I want many of the board meetings that our customers run to include a little SlideShare from Orb that shows a real-time ongoing pulse of NDR and a lot of the metrics that folks care about. We have teams that we’re working with that are excited about helping power their seller compensation through the data that’s in Orb or their customer success, churn prevention, and renewals. Again, to your point, you’ve got to peel the onion, it’s sitting under the tip of the iceberg. But we’re really after a shift in how the go-to-market stack needs to be built in a modern enterprise. And I think I’m excited about the role that Orb can play in this.
Saam Motamedi:
So Alvaro, as we begin to wrap up our conversation, I want you to again go back to when you started Orb in 2021. What have been some of the biggest surprises since then? How has the company evolved perhaps in some ways different than what you originally envisioned?
Alvaro Morales:
Maybe the thing that stands out the most is just the faster time cycles. I recently was looking up at our early pitch decks and the deck that we first showed you, Saam. You look at it and the diagrams have gotten prettier over time, but a lot of the sketch of the vision has remained. I could not have imagined the speed that this transformation has happening in the software industry. That saying of it’s slowly at first and then it happens all at once. I think that’s really happening because real talk, maybe our message of revenue efficiency in 2021, the boom of ZIRP and whatnot, was seen as a little bit more of a nice-to-have or we’ll get to that when we grow up and when that really matters. Whereas now it’s become an urgent priority overnight. And I think that the outcomes that Orb drives is really important for any software business.
Saam Motamedi:
Yeah, I would plus one to that, and I think the other thing that was probably hard for anyone to anticipate in 2021 was just how quickly we’d get catapulted into the AI era and the downstream impacts of that. Again, I think you talked about this. In 2021, there were a couple examples of really good usage-based pricing businesses, businesses like Snowflake and Twilio that really aligned with the way they priced with the way value was delivered. And in my role, I would talk to their founders like, we’ve got to get there, right? We’ve got to get there. We have to give our customers something that’s aligned and makes sense for them and has built-in NDR and all the rest for us. But again, it wasn’t like a must-do existential. And you fast forward to 2024 with the rise of agents, and it’s like if you’re still thinking about things primarily through a seat-based lens, you’re toast and there is no future. And I’m just struck by… I get pitched by tens of entrepreneurs every week and — pick a percentage — 80, 85, 90 percent of these companies are usage-based or consumption-based or outcome-oriented in the way they price. And I think that happened — I don’t want to speak for you — but from my perspective, that certainly happened. I knew that would eventually happen, but it happened much more quickly than I thought it would.
Alvaro Morales:
Exactly. And I think it just means that there’s a real element of right place, right time that we’re building this business in. And I think I’m just excited to accelerate into this even more so that we can deliver this value to many more customers with what we’re doing at Orb.
Saam Motamedi:
And so as you think about the next couple of years, what do you want Orb’s impact on the software industry to be? How do you think this developer-first, usage-based billing infrastructure can unlock or accelerate broader innovation in business models and in software?
Alvaro Morales:
I want us to be known for helping create more innovation in this ecosystem and reduce this innovation tax. Because if you think about it, if you’re putting engineers towards supporting billing and monetization of your product, you’re doing so from having done an assessment and realize, sure, that makes sense. That’s ROI positive. But it’s still painfully taxing to what other things you could be achieving. It leaves a huge opportunity cost on the table where you could redirect that investment towards core product innovation. So I want Orb to be known for enabling companies to ship their pricing as quickly as they ship their products.
Saam Motamedi:
Is there anything else you’d like our listeners to know before we wrap up here?
Alvaro Morales:
Yeah, if you’re looking for more flexibility in your monetization stack, come check us out. We actually, as part of this announcement, made a trial available on our website. So if you go to withorb.com/trial, you’ll be able to get right in the platform and start experiencing what it looks like to bring this kind of product-oriented thinking to the world of pricing infrastructure.
Saam Motamedi:
Excellent. Well, Alvaro, thank you again for coming on Greymatter. I loved this conversation. I’m excited to get it out to our listeners.
Alvaro Morales:
Thank you for having me.
Eric Johnson:
Thanks for listening to this episode of Greymatter. For more great conversations like this one, please follow or subscribe to the show wherever you listen to podcasts. You can also find a link to our YouTube channel in the description. Finally, we’d like to thank the people who helped make this podcast happen, including Elisa Schreiber and Fitz Barth. This episode was produced and edited by Eric Johnson from LightningPod.fm. This is Greymatter. See you next time!
