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In general, sure. In reality... not necessarily. Just think about everything else that goes into providing the service and getting (and retaining) users. After
by chrismeller 7y ago
In general, sure. In reality... not necessarily. Just think about everything else that goes into providing the service and getting (and retaining) users.
After you’ve included marketing and all the business people who are guiding the direction of the product you’ve got the HR and internal IT people and systems supporting all of that.
Having 100 customers paying $10 and 1000 paying $1 are very different things. Customer service costs are going to be (likely disproportionately) higher for the latter group simply because you’ve got a different pool - they are no longer your business users and power users, they’re grandma and grandpa who have no idea what they’re doing or how to explore and figure out how to use your service. Even if you build better tools and guides for self service that’s an engineering investment.
Credit card transaction fees will also be higher. Due to the type of user you’re also going to have a much higher rate of failures, which means more retries, follow-ups (Sendgrid is charging per email after all), and more users who are in the grace period whose data you have to retain but who aren’t actually paying for it. You’ll also have more people calling in or emailing trying to resolve this, which brings us back to higher customer service costs.
So while storage seems like what you’re selling and that there should be a linear correlation between 100gb and 1tb in reality what you’re selling is the service around that storage and that’s why things will never scale the way you’d expect.