Usage-Based Pricing
Pricing that scales with how much the customer uses the product — API calls, records processed, GB stored.
Usage-based pricing (also called consumption-based) charges customers based on measured usage rather than seats or flat subscriptions. Common in infrastructure (AWS, Stripe, Twilio), APIs, and AI products. Advantages: revenue expands with customer success without new-logo work; low barrier to entry. Disadvantages: harder to forecast, can create bill-shock, requires excellent usage instrumentation. For indie founders building infra or API products, usage-based is often the most natural pricing model.
Related terms
MRR (Monthly Recurring Revenue)
The predictable monthly revenue from active subscriptions. The indie-founder scoreboard metric.
PLG (Product-Led Growth)
A go-to-market motion where the product itself drives acquisition, activation, and expansion.
Freemium
A pricing model with a permanently-free tier and paid upgrades for advanced features.