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I'd still say you need to take a hard look at your pricing. Lets assume we're talking about a pretty standard Rails site on Heroku without ridiculous traffic. L
by Xorlev 10y ago
I'd still say you need to take a hard look at your pricing. Lets assume we're talking about a pretty standard Rails site on Heroku without ridiculous traffic. Lets say 1500 requests per minute average (25/s).
25 * 86400 * 30 * 0.05 / 1000 = $3,240
I'm legitimately going to be spending 5-10x as much for my loadbalancer as I am 2 Heroku dynos and a reasonable Heroku Postgres instance.
All I can say is that I'd recommend discounting your price by 5-10x to put it in reach. You don't want to be the biggest line item in someone's budget, you'll be the first to go.
Back in the early days of FullContact, we charged a _lot_ per record for our Person API. After a lot of feedback at SXSW Interactive, we announced a 50x price cut. I'm pretty sure that's the only reason our API took off as a business. We optimized on volume and made it cheap to sustain thousands of requests a second. Five years later, that's paid off for us quite well.
- mrkurt 10y agoWould it surprise you if I said we're testing pricing as part of our launch? I don't think anyone ever gets it right from the get go. :D Hopefully if we get to be the biggest infrastructure charge in someone's budget, it'll be really hard to get rid of us. 5-10x discounts for volume probably aren't unreasonable.
- Xorlev 10y agoBeen in the startup game, totally understand. I'm presenting my view, which could be wrong but I figured you'd like my unfiltered feedback. Like I said before, we too had it wrong from the start and products we launched after weren't priced correctly either. It's a fine balance to price something just right to drive new customers, retain old, and maximize margins to ensure your venture succeeds (or can at least take another round to continue building). Are you guys bootstrapped? Curious to hear more on that front. :)
- mrkurt 10y ago:thumbsup: We aren't bootstrapped, we raised a seed round. Turns out when you don't need money it's easy to get ... I'm happy to give you all the gory details if you want to shoot me an email (mrkurt at gmail). I think we triggered the flamewar thing on HN so I can't respond here very fast.
- qeternity 10y ago> We aren't bootstrapped, we raised a seed round. Turns out when you don't need money it's easy to get ... What? Why would you raise seed if you don't need it?
- chris_va 10y agoOld saying Take money when you can get it, not when you need it.
- qeternity 10y agoA runway is not money that you don't need. That's my point.
- mrkurt 10y agoThis is probably worthy of a blog post, but! We took investment for a few reasons. One is diversification, we can put our own money other places. More importantly, I think, is it's not weird when someone needs to get paid like it would be if we were personally funding the company. And, honestly, we wanted to be able to move faster. We can try riskier things, be more generous with free plans, etc, etc.
- always_good 10y agoWhy would ants store food in the summer?
- qeternity 10y agoBecause they will need it. Hence my point. Raising enough of a runway is just responsible. But raising money you don't need, isn't.