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We are not optimizing for revenue but for staying independent and sustainable. (Kagi dev here) In other words it does not matter if we could have $100,000/mont
by freediver 5y ago
We are not optimizing for revenue but for staying independent and sustainable. (Kagi dev here)
In other words it does not matter if we could have $100,000/month with another price point if it would cost us $150,000 to do so (every search has a fixed cost that does not go down with scale).
Our current price point includes a tiny margin that would allows us to break even at around 50,000 users. That is what we are optimizing for.
- Gareth321 5y agoIf I may ask, why do you believe that having more users and profit would undermine your ability to stay independent and sustainable? I would have thought that more users and profit would do the opposite: secure Kagi's ability to stay independent and sustainable. Intentionally reducing users and profit doesn't make any sense to me, given your stated goal.
- freediver 5y agoI think you were arguing for optimal price point which would maximize revenue, not profit? Our profit margin is already razor thin, I do not think it can be further optimized. Meaning we can not further reduce price to get more users without operating at a loss.
- Gareth321 5y agoI see the confusion. Optimal price point optimises for profit: https://www.accountingtools.com/articles/2017/5/13/optimal-price https://www.accountingtools.com/articles/2017/5/13/optimal-p... It sounds like you have a high marginal cost. As in, you pay every time someone searches for something. Can this not be reduced over time with greater efficiency of scale? FYI I use Kagi and like it. I’ve replaced Google :)
- freediver 5y agoNope, the cost is pretty much fixed. What we charge the users is just a hair above it so we have a hope of reaching sustainability at around 50,000 users. In other words there is nothing to optimize further. And it is only about one cent to search the entire web in 300ms with everything else Kagi does, that has to be impressive ? :)
- Gareth321 5y agoVery impressive :) So if Kagi profits $x per search, wouldn't they profit more with more searches? More users, more searches, more profit, more sustainable.