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If you get into trouble with your unit economics given such a raise, then you really need to think about your business model. How much value is your business re

If you get into trouble with your unit economics given such a raise, then you really need to think about your business model. How much value is your business really creating ON TOP of the maps? I don't want to be snarky, but I think many businesses don't think enough about this issue of value creation.

alrex021 8y ago
A 20x jump on the monthly charge, especially in lower margin business, will hurt whichever way you look at it, IMHO.
- bflesch 8y ago
  That's exactly what I was suggesting: If you are stuck in a low margin business and see that a provider such as google is screwing up your margins, you should really try to work on another idea which has higher margins. Working on a low margin business is a choice! You can always ditch it and try to find something with higher margins (= higher value created for users).
  - Symbiote 8y ago
    Did you miss where they wrote "a developing country"? There are places where a software developer's good salary is $10,000 a year. Google doesn't need to provide a service in that country, but it's understandable that a 20× increase is going to hit harder than in a wealthy country.
    - bflesch 8y ago
      No I did not miss it. Also I'm based in a neighboring country to Poland. The salary you mentioned won't get you a software developer anywhere in the EU. I am only pointing out that entrepreneurs need to rethink their business models if they are hit by this price increase, as this is a very strong indication they are not working on a healthy, high-margin business.
      - MattBlissett 8y ago
        I very occasionally work with developers from places like Benin and Zimbabwe, so I'm giving the benefit of the doubt here.
      - IkmoIkmo 8y ago
        A 20-30x increase in costs being a problem for your business isn't indicative of being in an unhealthy low-margin business per se, quite the opposite. If you were operating in a 95% profit margin industry, which is an insanely generous hypothetical, increasing the 5% cost component by 20-30x would destroy you overnight. This is what happened to OP, and they were able to switch to haf a dozen competitors at a fraction of the price with almost equivalent service offerings for their use-case. The notion they have a fundamentally unworkable business model doesn't apply here.
ericd 8y ago
If you're a consumer business with low margins but very high scale, this is a killer. Before, you could be providing value to a lot of people at a low price point (or free/ad supported). This makes ad-supported much, much harder.
foobarbazetc 8y ago
Name one business that can absorb a 20x increase in a component cost.
- _emacsomancer_ 8y ago
  Apple.
- gorbachev 8y ago
  Google.
- jhall1468 8y ago
  Name one billion dollar business that is a success today when 80% of its product is an API call to an externally owned service? I get the frustration and pain with this, but let's be honest, if your business was totally reliant on Google Maps it probably wasn't a great business to begin with. Way too many eggs in a basket you don't own.
  - geggam 8y ago
    AWS is an API
    - jhall1468 8y ago
      No, AWS is infrastructure as a service. We're talking about companies that utilized Google Maps as effectively their primary product.
  - salvar 8y ago
    I a billion dollar business the only definition of a successful one?
    - jhall1468 8y ago
      Never said it was. My point was extremely successful businesses don't build their business on an external product.
JaggedNZ 8y ago
I know 1st world companies with millions of dollars in revenue who quickly switched away from Google Maps, at some expense, to alternate map providers after Google hiked up its prices for Premium customers a few years ago. There where so many "why should we pay/develop X, Google does it for free" conversations at one of my previous employers who competes in the mapping space with Google.

alrex021 8y ago

A 20x jump on the monthly charge, especially in lower margin business, will hurt whichever way you look at it, IMHO.

bflesch 8y ago
That's exactly what I was suggesting: If you are stuck in a low margin business and see that a provider such as google is screwing up your margins, you should really try to work on another idea which has higher margins. Working on a low margin business is a choice! You can always ditch it and try to find something with higher margins (= higher value created for users).
- Symbiote 8y ago
  Did you miss where they wrote "a developing country"? There are places where a software developer's good salary is $10,000 a year. Google doesn't need to provide a service in that country, but it's understandable that a 20× increase is going to hit harder than in a wealthy country.
  - bflesch 8y ago
    No I did not miss it. Also I'm based in a neighboring country to Poland. The salary you mentioned won't get you a software developer anywhere in the EU. I am only pointing out that entrepreneurs need to rethink their business models if they are hit by this price increase, as this is a very strong indication they are not working on a healthy, high-margin business.
    - MattBlissett 8y ago
      I very occasionally work with developers from places like Benin and Zimbabwe, so I'm giving the benefit of the doubt here.
    - IkmoIkmo 8y ago
      A 20-30x increase in costs being a problem for your business isn't indicative of being in an unhealthy low-margin business per se, quite the opposite. If you were operating in a 95% profit margin industry, which is an insanely generous hypothetical, increasing the 5% cost component by 20-30x would destroy you overnight. This is what happened to OP, and they were able to switch to haf a dozen competitors at a fraction of the price with almost equivalent service offerings for their use-case. The notion they have a fundamentally unworkable business model doesn't apply here.

ericd 8y ago

If you're a consumer business with low margins but very high scale, this is a killer. Before, you could be providing value to a lot of people at a low price point (or free/ad supported). This makes ad-supported much, much harder.

foobarbazetc 8y ago

Name one business that can absorb a 20x increase in a component cost.

_emacsomancer_ 8y ago
Apple.
gorbachev 8y ago
Google.
jhall1468 8y ago
Name one billion dollar business that is a success today when 80% of its product is an API call to an externally owned service? I get the frustration and pain with this, but let's be honest, if your business was totally reliant on Google Maps it probably wasn't a great business to begin with. Way too many eggs in a basket you don't own.
- geggam 8y ago
  AWS is an API
  - jhall1468 8y ago
    No, AWS is infrastructure as a service. We're talking about companies that utilized Google Maps as effectively their primary product.
- salvar 8y ago
  I a billion dollar business the only definition of a successful one?
  - jhall1468 8y ago
    Never said it was. My point was extremely successful businesses don't build their business on an external product.

JaggedNZ 8y ago

I know 1st world companies with millions of dollars in revenue who quickly switched away from Google Maps, at some expense, to alternate map providers after Google hiked up its prices for Premium customers a few years ago. There where so many "why should we pay/develop X, Google does it for free" conversations at one of my previous employers who competes in the mapping space with Google.