7 Business model

Praxis charges customers for actual resource usage, with current revenue coming from the difference between selling prices and purchasing costs.

Charge for resources, initially provide building tools without a separate fee

In the shop example, the support agent calls models, may use a sandbox to run tools, and may consume search and compute. The shop pays for those resources as used, rather than buying a software license or paying for idle resources; a subscription still purchases usage.

The tools for building, managing, publishing, and operating agents are another part of our initial investment. We do not charge separately for that system early on, seeking adoption and trust through convenience, usefulness, and affordability; using Praxis to build an agent does not change the price of the same resource.

Where the margin comes from

Model prices use the model vendor’s official price as a benchmark and stay below it. We buy from upstream suppliers, so better purchasing terms can improve the margin; the markup rate is the same across suppliers, and routing, the choice of supplier for a request, is not driven by that margin.

Recurring operating expenses are counted as compute costs. Small shares are included in resource prices; significant, measurable costs are billed as separate usage-based resources. Margins on our own compute also count as resource income.

We take responsibility for quality

We answer to customers rather than protect suppliers’ business. Customers normally select models without choosing the underlying supplier; we select, monitor, and replace suppliers, and must detect degraded service and compensate customers before they complain, even when we receive supplier rebates.

Large customers can negotiate private, time-limited contracts, allowing the platform to seek terms upstream against committed volume. How quickly upstream price changes reach customers affects retention; price-sensitive customers may leave quickly, others compare over time, and the platform bears the consequences of its pricing choices.

Use savings and partner shares to acquire customers

A shop that stays for the price and experience can recommend the service to other businesses. We turn money otherwise spent on advertising and a sales force into customer savings and partner earnings; referrals receive rewards, distribution earns a share, and customers can become partners.

Revenue sharing means allocating part of a transaction’s proceeds to those who bring customers and usage. Referrers, partners, distributors, and resellers participate in the same system; referrers can take on continuing sales work by introducing customers.

Partners earn under the public partner revenue-sharing plan, Rising Tide. Distributable proceeds come from the purchasing margin after relevant transaction costs: when the available margin is thin it goes to the partner, and when it is thicker it is split equally; the plan page gives the full tiers, and the share is not added to the customer’s price.

This approach aims to bring direct spending on acquiring additional customers close to zero, accepting thin early gross margins and improving purchasing terms through scale. That is an operating goal, not a measured zero acquisition cost; the practical path is in Go-to-market.

Charge for the system after scale

Once scale and trust develop, platform fees, selected services, fees covering building through operation, and shares of Service Agent revenue are ways to earn from the system’s value. We do not set prices or promise launches now; the normal path waits for scale, while Risks retains earlier fees as a response if production costs or purchasing advantages fail.

Costco’s merchandise sales and membership fees illustrate charging for two different forms of value: merchandise prices help customers save, while membership supports the ongoing business. Resource savings and future system fees also play different roles for Praxis, with timing determined by our own operating conditions.

Low prices are easy to copy. The next chapter describes the more lasting advantages we hope to build.