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While highly repeatable, the biggest issue I've seen with this pattern is actually the data pipeline component. Specifically: - The pricing structures don't te
by cosmie 7y ago
While highly repeatable, the biggest issue I've seen with this pattern is actually the data pipeline component. Specifically:
- The pricing structures don't tend to be amenable to this operating model. Most of the newer SaaS ETL services like Fivetran and Alooma tend to structure their pricing discrimination/tiering to favor a higher volume of throughput through a low number of individual connectors/sources. At least the last time I was sourcing one of these solutions, trying to follow the above pattern (a high volume of individual connections with potentially low volume of events from each source) was almost impossible to negotiate without a substantial increase in cost for any given volume of events.
- The pricing structures also tend to be unfriendly to unpredictable and unknown event volume, particularly at the pre-launch phase. While that's not a problem if you're aiming towards the enterprise space or have investment capital to burn, it's a non-starter for people looking to bootstrap an idea that may or may not gain any market adoption. Industry- and domain-specific BI tools are inherently niche, and tend to have a market discovery phase as you align with that industry. Committing to minimal annual event volume for your data pipelines before you've even attempted to go to market pushes you towards rolling your own pipelines and away from using any of the tools like Fivetran that would have simplified the go to market process in the first place.
- Data security and legal compliance. It's quite possibly more of an issue with my current environment and client pool, which skews more towards the enterprise. But my current job is infinitely more difficult because leveraging SaaS-based ETL tools like Fivetran, Alooma, Funnel.io, Supermetrics, etc are all absolute non-starters. Between GDPR, the new California privacy laws, and all of the press on data leaks over the last few years, any solution that includes "sending internal data to external companies" or "providing credentials for internal data sources to external parties" triggers instant lawyer and IT security review. And that includes going all the way down the rabbit hole - if we try to use a vendor, then we need to know and audit who all they give access to, etc. Which basically means we have to roll our own pipelines and keep them internal or on a client's own cloud account. At least for a lot of interesting use cases for domain-specific BI tools, I could see that same caginess coming into play.
- georgewfraser 7y agoI can’t speak to the others, but Fivetran pricing is based on connectors, not volume, and we have a “powered by Fivetran” price sheet for multitenant scenarios. The security reviews when there are 3 parties are a pain. It can be overcome, the benefit of getting the data infrastructure automated just has to justify the extra sales effort.
- aaronharnly 7y agoI think that was GP’s point - pricing by the connector means that younger companies with a lot of SaaS services but not a lot of data in each may struggle to find a workable price. (I’m not commenting on whether that’s true, but I think that’s what they meant.)