The Incentive Gap in AI-Native Software

Why outdated Customer Success comp plans are quietly killing growth

When a company is small, it’s tempting to believe incentives are a detail. They’re not. Incentives are the system.

They determine how work actually gets done, where tension accumulates inside the organization, and—most importantly—whether you can correctly diagnose what’s broken when growth stalls.

If incentives are wrong, every signal you think you’re reading is noisy.

The Mistake Most Teams Make

Most early teams design compensation defensively.

• What can we afford?

• How do we keep burn down?

• What’s market?

These are reasonable questions—but they’re the wrong starting point.

The right starting point is much simpler and much harder:

What behavior must exist for this business to work right now?

Until you answer that, the spreadsheet is fiction.

Growth Roles Should Feel Like Growth Roles

If a role is truly responsible for growth—new revenue, expansion, conversion—then compensation needs to feel like growth.

Once base salaries creep high enough, something subtle but fatal happens:

• There’s no real consequence for missing

• There’s no real pull toward winning

• The role becomes operational, not kinetic

You don’t need people living on ramen. But if someone can completely miss their number and still feel comfortable, you’ve removed the tension that makes growth roles work.

That tension isn’t cruelty. It’s alignment. And alignment is non-negotiable if you want to build something real. Sales leaders have long understood this. Customer Success, historically, has been structured differently—broader mandates, more defensive scope, and a much smaller variable component. That made sense for a long time. But the role of CS is changing—and compensation has to change with it.

Variable Pay Isn’t Protection — It’s Signal

Founders often get this backward.

Variable pay isn’t about protecting the company.

It’s about protecting the signal.

When upside is large and obvious:

• If performance is strong, everyone wins

• If performance is weak, you immediately know it’s not because incentives were misaligned

That clarity is priceless.

Under-incentivize, and when growth slows you’re left guessing:

• Is it the product?

• Is it the market?

• Is it the person?

Or, did we simply fail to motivate correctly?

This is why I err on the side of generosity. A generous incentive plan eliminates an entire category of excuses—and excuses are incredibly expensive.

Why This Matters Right Now for Customer Success

AI-native companies have fundamentally changed how software is priced, packaged, and sold.

• Consumption-based pricing.

• Outcome-based pricing.

• Paid pilots.

• Trials.

• Fast implementations.

And in many cases, the product doesn’t even work without a human doing the heavy lifting during setup.

The sale is no longer the moment of growth—it’s a sales stage that grants permission to prove value. Increasingly, that value is proven not by sellers, but by forward-deployed Customer Success teams. I’ve heard of organizations that have more FDCS people than sellers. In the old world, you might have one sales engineer for every eight AEs. In today’s AI-native world, the way deals are supported has inverted.

Customer Success is no longer a downstream function. It now sits directly inside the revenue engine.

The more customers use the product, the more value they experience. The more value they experience, the more they pay. That flywheel doesn’t start at renewal—it starts immediately after the first yes. The fastest-growing teams are winning because they’re the most helpful.

This shift has elevated Customer Success from “retention insurance” to growth infrastructure—and most compensation plans haven’t caught up.

Where Things Break

Here’s where it gets dangerous.

I’m intentionally avoiding titles, because we haven’t settled on what they are in the modern GTM model. What I do know is this; When one person sources the opportunity, and another converts it into real revenue.

Credit becomes radioactive.

This tension has always existed between Sales and Customer Success—but AI-native speed compresses the cycle and amplifies the conflict.

If the person who sourced the deal can see meaningful dollars on the other side of conversion, every handoff feels like an attack on the rep’s personal bottom line.

This is how resentment forms:

• “I did the hard part.”

• “They’re getting paid for my work.”

• “Why am I capped when they’re not?”

This isn’t a people problem. Most people are rational. It’s an incentive design problem.

Sometimes You Should Double-Pay (On Purpose)

Here’s my unpopular but practical take:

Early on, it’s often better to overpay than to under-incentivize.

Yes—sometimes that means paying two people on the same revenue. It feels inefficient. It is inefficient. But it buys you something far more valuable than efficiency:

Certainty.

• If growth happens, you know product–market fit is there.

• If growth doesn’t happen, you know incentives weren’t the blocker.

You can clean this up later—and you will. But you only earn the right to fine-tune incentives if you have crystal-clear signal on PMF. The failure mode to avoid is realizing too late that incentive misalignment, not product execution, was what actually held you back.

At the end of the day, your job as a founder—or as someone who reports to a founder—is simple: make sure you’re building a product customers actually need.

Metrics Don’t Create Ownership — Control Does

Many teams tie Customer Success compensation to outcomes individuals don’t fully control:

• Retention

• Net dollar expansion

• Long-term usage

These metrics truly matter—but they’re often downstream of product quality, roadmap sequencing, and timing.

People are most motivated when:

• They can directly influence the outcome

• The reward is close in time to the action

• The rules are simple and obvious

If someone feels judged on forces outside their control, motivation decays—even if the metric is philosophically correct.

This is where many CS comp plans quietly fail.

The Real Question Incentives Should Answer

Incentives aren’t about motivation. They’re about truth.

They exist to tell you whether the product works—or whether you’re lying to yourself about why it doesn’t.

If the business fails, it should fail with clarity. Anything else is self-deception.