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Similar thoughts here. However, the one project Apex Ping, says he's making $600/m but not cash flow positive yet. I'm confused as to how that's even possible

Similar thoughts here. However, the one project Apex Ping, says he's making $600/m but not cash flow positive yet. I'm confused as to how that's even possible. I can run that service on a handful of VM's for ~$60/m. He says he's using Lamda, perhaps he should rethink that decision if his overhead is really that high.

aleem 10y ago
Could be that most customers are on the free tier and he has multi AZ deployments plus other AWS services (data, queues, etc). Typically base costs are higher when you design for scale vs when you don't. And marginal costs are lower when you design for scale vs when you don't.
- chrishacken 10y ago
  There is no free tier. There's a trial. And yes, that's obviously a concern, but you can design for profit first and refine for scale. It wouldn't be very difficult to put some of those things in a VM to start and then move them to lambda once breaking even is no longer an issue.
  - tjholowaychuk 10y ago
    Responded above, there was a free plan initially.
tjholowaychuk 10y ago
There's a lot more to it than that, and I'm currently supporting ~2000 users on the free plan as well (though I'm phasing that plan out). Ping is running in 7 regions, has an Elasticsearch cluster for logging, another for the check data itself, thousands of checks running each minute and thousands of alerts running each minute. RDS for the primary store, SES for emails, EC2 for hosting the app itself. Add on extra services such as Baremetrics and these things add up quickly. Run 7 EC2 nodes and you're already well over $250, not to mention the loads in each region are different. Lambda's pricing is indeed not competitive with VMs right now, but that will go down with FaaS becoming wildly available from other providers. The more important thing to me is that it's close to zero maintenance, no bastions, no AMIs, no provisioning, no third-party monitoring, etc. If you've ever worked with Elasticsearch you'd also know that it requires a pretty substantial set of resources to function well. I'm happy to over-provision for the beginning if it means providing a better experience. Nothing would be worse than under-provisioning IMO.
- alex_hitchins 10y ago
  >(though I'm phasing that plan out). Would you recomend starting something with a free tier and phasing it out if it's not working over charging up front from the beginning? I can see pros/cons to both sides.
  - wwalser 10y ago
    I've been looking into myself recently. From successful bootstrappers in B2B, nearly 100% of the advice that I've gotten is to start without free and add it later as a lead-gen mechanism if it fits your business. Early on customer acquisition is a slog and generally relies on 1:1 conversations often with a pre-existing relationship (in-network). Hopefully feedback from these people help you get close enough to product market fit that outsiders will consider using the product. From there it's a marketing and lead nurturing game where freemium may make sense. Advice for B2C would be quite different.
  - tjholowaychuk 10y ago
    I think it depends greatly on the cost of supporting the free plans, mine just went a little out of control, I was getting ~100 or more users per day. If it was really cheap to support them it might be worth the marketing side of things. And of course for VC backed companies this still looks more attractive than not having the free users at all.

aleem 10y ago

Could be that most customers are on the free tier and he has multi AZ deployments plus other AWS services (data, queues, etc). Typically base costs are higher when you design for scale vs when you don't. And marginal costs are lower when you design for scale vs when you don't.

chrishacken 10y ago
There is no free tier. There's a trial. And yes, that's obviously a concern, but you can design for profit first and refine for scale. It wouldn't be very difficult to put some of those things in a VM to start and then move them to lambda once breaking even is no longer an issue.
- tjholowaychuk 10y ago
  Responded above, there was a free plan initially.

tjholowaychuk 10y ago

There's a lot more to it than that, and I'm currently supporting ~2000 users on the free plan as well (though I'm phasing that plan out). Ping is running in 7 regions, has an Elasticsearch cluster for logging, another for the check data itself, thousands of checks running each minute and thousands of alerts running each minute. RDS for the primary store, SES for emails, EC2 for hosting the app itself. Add on extra services such as Baremetrics and these things add up quickly. Run 7 EC2 nodes and you're already well over $250, not to mention the loads in each region are different. Lambda's pricing is indeed not competitive with VMs right now, but that will go down with FaaS becoming wildly available from other providers. The more important thing to me is that it's close to zero maintenance, no bastions, no AMIs, no provisioning, no third-party monitoring, etc. If you've ever worked with Elasticsearch you'd also know that it requires a pretty substantial set of resources to function well. I'm happy to over-provision for the beginning if it means providing a better experience. Nothing would be worse than under-provisioning IMO.

alex_hitchins 10y ago
>(though I'm phasing that plan out). Would you recomend starting something with a free tier and phasing it out if it's not working over charging up front from the beginning? I can see pros/cons to both sides.
- wwalser 10y ago
  I've been looking into myself recently. From successful bootstrappers in B2B, nearly 100% of the advice that I've gotten is to start without free and add it later as a lead-gen mechanism if it fits your business. Early on customer acquisition is a slog and generally relies on 1:1 conversations often with a pre-existing relationship (in-network). Hopefully feedback from these people help you get close enough to product market fit that outsiders will consider using the product. From there it's a marketing and lead nurturing game where freemium may make sense. Advice for B2C would be quite different.
- tjholowaychuk 10y ago
  I think it depends greatly on the cost of supporting the free plans, mine just went a little out of control, I was getting ~100 or more users per day. If it was really cheap to support them it might be worth the marketing side of things. And of course for VC backed companies this still looks more attractive than not having the free users at all.