5 ms·

Tell HN: Sendgrid increases price by almost 50%, weeks after acquisition

30 points by siquick 8y ago

Just received this email. "As a valued SendGrid customer, we would like to inform you of an upcoming price change to SendGrid’s Essentials plans, effective January 1st, 2019. This change reflects ongoing investment in our infrastructure, products, and services, ensuring that we continue to provide you with a best-in-class experience. Your Essentials 40K plan price will change from $9.95 per month to $14.95 per month. Please note, this pricing will be in effect for new customers on December 1st, 2018, but as an existing customer, we’re providing you with additional notice in case you have any questions. Your January bill will reflect these changes."

AznHisoka 8y ago
"valued SendGrid customer"
- anitil 8y ago
  50% more valued by the looks of it
rfc 8y ago
We signed up with them 2 months ago. As a small but rapidly growing company, we have to keep a close eye on our costs. We'll be cancelling our service with them today because of the price hike.
- ezekg 8y ago
  You'll be canceling over a $5 price increase? Seems a little excessive. Paying $15/mo isn't unreasonable, imo, for sending up to 100,000 emails. Mailgun charges $79/mo for the same, if I'm not mistaken.
  - rfc 8y ago
    Seems excessive on the surface but over the course of a year, that's $60. Still pedantic? Sure, but $60 in adspend for us generates $1200 in revenue. As a bootstrapped company, every dime matters to us. Why sacrifice that when there are alternative options for cheaper, especially when we're only sending out a handful of emails/mo?
    - tomlor 8y ago
      If every dollar in adspend nets you 20x in revenue, why are you quibbling about 5 bucks a month and not pouring money into advertising?
      - yroc92 8y ago
        I’d like to know as well. If you’re getting 20x ad spend, you’ve hit the jackpot.
        rfc 8y ago
        Couple things: 1) We're services/project oriented. So for each $1 we spend, we receive ~$20 back on revenue. That unfortunately doesn't compound and isn't recurring in the normal SaaS sense. 2) That's $20:$1 on revenue but not profit. We average between 15-25% net profit. Not great and we're trying to focus heavily on increasing this but it's quite tricky. Incrasing this usually means very expensive equipment purchases for automation. 3) I wish we could pour more money into advertising but we have to save up for additional equipment to purchase to expand services or pay for future software projects that could help us generate recurring revenue. We don't have deep pockets to leverage since it's bootstrapped. Otherwise, we'd have gone in guns blazing on advertising!
        soneca 8y ago
        If every $1 becomes $3 ~ $4 in profit, makes no sense at all to "save" for equipment. The progression with only investing in ads, each cycle multiply by tree your profit: $1 -> $3 -> $9 -> $27 -> $81 -> $243 -> $729 -> $2187 The progression with "saving" the money $1 -> $2 -> $3 -> $4 -> $5 -> $6 -> $7 -> $8
        kohanz 8y ago
        I think they're saying that they are unable to meet the demand (lack of either equipment or people) for the new business those extra advertising dollars would bring in. So they can't just continually pour $ into that pump. Although I agree it's unusual to see that metric used (revenue per ad-spend) for a product that seemingly can't be scaled very much.
- kull 8y ago
  You should probably consider increasing your prices
dzhiurgis 8y ago
Possibly related? https://www.fairfieldcurrent.com/2018/11/28/investors-purchase-high-volume-of-sendgrid-put-options-send.html https://www.fairfieldcurrent.com/2018/11/28/investors-purcha...
gesman 8y ago
This is very competitive space. Hiking the price will make competitors happy and customers not.
- bdcravens 8y ago
  Probably why Twilio isn't interested in making their money at the bottom. (Can't tell if they are increasing price at Pro tier - I haven't seen any such email however)
duarteoc 8y ago
This is not good for customers.
- SamReidHughes 8y ago
  It makes them even more valued!
cm2012 8y ago
If you save a half hour of developer time per year by not switching, you come out ahead.

30 points by siquick 8y ago

AznHisoka 8y ago

"valued SendGrid customer"

anitil 8y ago
50% more valued by the looks of it

rfc 8y ago

We signed up with them 2 months ago. As a small but rapidly growing company, we have to keep a close eye on our costs. We'll be cancelling our service with them today because of the price hike.

ezekg 8y ago
You'll be canceling over a $5 price increase? Seems a little excessive. Paying $15/mo isn't unreasonable, imo, for sending up to 100,000 emails. Mailgun charges $79/mo for the same, if I'm not mistaken.
- rfc 8y ago
  Seems excessive on the surface but over the course of a year, that's $60. Still pedantic? Sure, but $60 in adspend for us generates $1200 in revenue. As a bootstrapped company, every dime matters to us. Why sacrifice that when there are alternative options for cheaper, especially when we're only sending out a handful of emails/mo?
  - tomlor 8y ago
    If every dollar in adspend nets you 20x in revenue, why are you quibbling about 5 bucks a month and not pouring money into advertising?
    - yroc92 8y ago
      I’d like to know as well. If you’re getting 20x ad spend, you’ve hit the jackpot.
      - rfc 8y ago
        Couple things: 1) We're services/project oriented. So for each $1 we spend, we receive ~$20 back on revenue. That unfortunately doesn't compound and isn't recurring in the normal SaaS sense. 2) That's $20:$1 on revenue but not profit. We average between 15-25% net profit. Not great and we're trying to focus heavily on increasing this but it's quite tricky. Incrasing this usually means very expensive equipment purchases for automation. 3) I wish we could pour more money into advertising but we have to save up for additional equipment to purchase to expand services or pay for future software projects that could help us generate recurring revenue. We don't have deep pockets to leverage since it's bootstrapped. Otherwise, we'd have gone in guns blazing on advertising!
        soneca 8y ago
        If every $1 becomes $3 ~ $4 in profit, makes no sense at all to "save" for equipment. The progression with only investing in ads, each cycle multiply by tree your profit: $1 -> $3 -> $9 -> $27 -> $81 -> $243 -> $729 -> $2187 The progression with "saving" the money $1 -> $2 -> $3 -> $4 -> $5 -> $6 -> $7 -> $8
        kohanz 8y ago
        I think they're saying that they are unable to meet the demand (lack of either equipment or people) for the new business those extra advertising dollars would bring in. So they can't just continually pour $ into that pump. Although I agree it's unusual to see that metric used (revenue per ad-spend) for a product that seemingly can't be scaled very much.
kull 8y ago
You should probably consider increasing your prices

dzhiurgis 8y ago

Possibly related? https://www.fairfieldcurrent.com/2018/11/28/investors-purchase-high-volume-of-sendgrid-put-options-send.html https://www.fairfieldcurrent.com/2018/11/28/investors-purcha...

gesman 8y ago

This is very competitive space. Hiking the price will make competitors happy and customers not.

bdcravens 8y ago
Probably why Twilio isn't interested in making their money at the bottom. (Can't tell if they are increasing price at Pro tier - I haven't seen any such email however)

duarteoc 8y ago

This is not good for customers.

SamReidHughes 8y ago
It makes them even more valued!

cm2012 8y ago

If you save a half hour of developer time per year by not switching, you come out ahead.