6 ms·

If your "competitive advantage" costs you money for every customer acquisition is it really an advantage?

by mdoms 5y ago

eslaught 5y ago
It depends on whether that cost is higher or lower than the value you get from paying customers (plus goodwill)---i.e., it's a customer acquisition cost. And whether this particular method of customer acquisition is more or less cost-effective than other methods. Since they're doing this, I assume they've done the analysis and determined this is no longer cost effective for them. But I'm surprised, because (a) they'll lose goodwill, and (b) what's their alternative plan for customer acquisition? I don't think Gitlab has grown to the point where they can afford to cut their growth, but I don't see how they're going to avoid that on the path they're going down.
- mdoms 5y ago
  Just got off the phone with AWS, they say no they won't take payment in "customer good will"???
  - eslaught 5y ago
    I'm not sure what you're saying. AWS literally has a free tier. They're playing the same game as Gitlab, and part of that is paying for potential customers to get access to a baseline level of service to grow their experience with the product and generate goodwill. I don't have any inside details, but I'd suspect that AWS also pays for PR, either through an internal team or external vendors. So "customer goodwill" is (probably) something they pay money for. Real dollars. This isn't free; you have to pay for it somehow. Whether it's dollars to fund a PR team (and the whole funnel of marketing/sales/etc.), or through free tiers designed to spread by word of mouth... you can't expect to acquire customers for free.
  - altdataseller 5y ago
    AWS literally gives a lot of startups 1-2 years of free credits.
PaywallBuster 5y ago
You can use their CI "system" (the nice interface + config file) without using their CI runners (probably the biggest cost portion in the solution) Bundling CI minutes on the paid plan doesn't change much, as plenty of customers will keep running their own CI runners for a variety of reasons. Which means they're essentially very cheap users of Gitlab or would otherwise consider cheaper plans like 5$ a month

If your "competitive advantage" costs you money for every customer acquisition is it really an advantage?

by mdoms 5y ago

If your "competitive advantage" costs you money for every customer acquisition is it really an advantage?

It depends on whether that cost is higher or lower than the value you get from paying customers (plus goodwill)---i.e., it's a customer acquisition cost. And whether this particular method of customer acquisition is more or less cost-effective than other methods. Since they're doing this, I assume they've done the analysis and determined this is no longer cost effective for them. But I'm surprised, because (a) they'll lose goodwill, and (b) what's their alternative plan for customer acquisition? I don't think Gitlab has grown to the point where they can afford to cut their growth, but I don't see how they're going to avoid that on the path they're going down.

mdoms 5y ago
Just got off the phone with AWS, they say no they won't take payment in "customer good will"???
- eslaught 5y ago
  I'm not sure what you're saying. AWS literally has a free tier. They're playing the same game as Gitlab, and part of that is paying for potential customers to get access to a baseline level of service to grow their experience with the product and generate goodwill. I don't have any inside details, but I'd suspect that AWS also pays for PR, either through an internal team or external vendors. So "customer goodwill" is (probably) something they pay money for. Real dollars. This isn't free; you have to pay for it somehow. Whether it's dollars to fund a PR team (and the whole funnel of marketing/sales/etc.), or through free tiers designed to spread by word of mouth... you can't expect to acquire customers for free.
- altdataseller 5y ago
  AWS literally gives a lot of startups 1-2 years of free credits.

PaywallBuster 5y ago

You can use their CI "system" (the nice interface + config file) without using their CI runners (probably the biggest cost portion in the solution) Bundling CI minutes on the paid plan doesn't change much, as plenty of customers will keep running their own CI runners for a variety of reasons. Which means they're essentially very cheap users of Gitlab or would otherwise consider cheaper plans like 5$ a month