The AI Agent Outcome-Based Pricing Journey - with Kunal Agarwal, CFO Gorgias

**Ray Rike** (0:08)
Welcome to today's episode of the AI to ROI Podcast. Today, I am joined by Kunal Agarwal, the CFO at Gorgias. I'll be covering four key topic areas with Kunal today. First, the strategic decision to move to integrating AI agents in the Gorgias platform.
Second, the story behind their outcome-based pricing decisions, the impact of embedding AI in having outcome-based pricing on their gross margins. Finally, the operational reality of managing profitability in an outcome-based AI-first environment. With that, Kunal, would you please take a moment to give a brief overview of your journey to becoming a guest here on the AI to ROI podcast?

**Kunal Agarwal** (0:55)
Sure, Ray. It's nice to talk with you today.
I've been in and around the world to finance for the last 20 plus years. I'm the CFO at Gorgias. We're the leading e-commerce conversational platform that's out there. We focus on e-commerce merchants selling on Shopify, and we aim to power their conversations across any type of platform that they may have within the Shopify ecosystem.

**Ray Rike** (1:22)
Remember when CloudCross first started surprising people? Finance would open the AWS invoice. No one could explain what drove it, and engineering would spend a week building a spreadsheet to explain it, and it was still wrong.
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Now on to the show. Okay. Well, thank you for that introduction. Now, I met you at Charge Me's Believe Conference and saw your presentation, and to talk to you after you get off the stage, because I knew that our audience would love to learn from your experience. So let's start with the strategic decision to introduce and integrate AI and have AI agents in the Gorgias platform.
Maybe my question is, how long did it take from that first, we should do this, to saying, okay, we've decided to deploy in the-

**Kunal Agarwal** (3:02)
Yeah, so I think to understand that question, maybe I'll take a minute to explain the evolution of the company. So the Gorgias company, we founded about 10 years ago. So we've been around for a little while, and so the DNA of the company, as when we first started, was a helpdesk software, and helpdesk software for e-commerce merchants selling on Shopify. So what you really think about that is like that's what we call CX, customer experience in the B2C market kind of catering to kind of support and helpdesk. And so for a long time, that was the core product. We have a leading market share in that product and dominant in the world of e-commerce.
And I think it's probably at the beginning of 2024 where, you know, OpenAI had finally launched some of their more flagship models. The technology around LLMs had started to become a little bit more mainstream and usable.
And I think that's when, as an exact team, we kind of said, like, hey, the legacy playbook in customer support, you know, deflection bots and decision trees, this is not going to be the future of customer support. And so I think to your question, like, hey, when did we take the decision? I think the decision was pretty quick at the beginning-ish of 2024 of that. Hey, we need to embrace an agentic future. And I think what was critical in this, and I think a lot of companies actually get wrong is, they think about trying to just bolt on an AI solution to what they're doing. And I think in order to really provide customer value, in order to win in today's market space, you have to think about how to re-architect a product that delivers better value at scale. Like, how is your current product platform, if you just bolt it on, it's not, I think a little bit misleading and not going to provide the customer value. So I think we decided pretty early on that that's the path we want to go to. And, you know, there was, it took a while to actually create a product that was performative, right? And I think unlike some other industries where you're selling to maybe different constituents, or you're developing a coding product for an engineer, we're actually developing a product that's touching our merchants customers. And so the risk tolerance there for hallucinations and for a non-performative product is pretty low. So I think we rushed to kind of get a product out that we felt had a good belief. And what we actually did was focus on one use case first. Instead of trying to do all the use cases at once, so we made the decision in early 2024, our first product came out in probably July, August of 2024 And we focused just on the email part of AI Agent, which we thought we could do with pretty high success. We've since then started iterating and having obviously diversifying into chat, into shopping assistance, and different things. But yeah, I think that first eight to nine months was quite a big sprint of figuring out how do we build the right architecture to go do this and build a product that delivers customer value.