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If I were their VP of Engineering, the questions jmilloy asked would be top of mind for a post mortem. I'd also raise the issue of whether the $9.99 all-you-ca

by biot 13y ago

If I were their VP of Engineering, the questions jmilloy asked would be top of mind for a post mortem. I'd also raise the issue of whether the $9.99 all-you-can-eat plan should have a specific limit in terms of absolute number of live connections. From their pricing page, it looks like OFA could have just used the Basic (free) plan. Even still, they will never recoup their costs from this one call even if OFA remains a $9.99/month subscriber for a decade. If "We worked all weekend..." means two engineers worked 4 hours Saturday and 4 hours Sunday, that's 8 hours/engineer * 2 engineers * $100/hour = $1600 of time was spent. That's 13 years at $10/month, not even factoring in infrastructure or bandwidth costs from the call itself. And I'm guessing that estimate is an order of magnitude less than the actual time spent. If I were a potential customer evaluating providers, I would be scared off by your current offer of what appears to be unlimited usage and unlimited priority support for $10/month as I'd have serious doubts of your ability to remain in business a year from now. No doubt the effort invested in preparation for the OFA call will pay dividends for future scalability, but I doubt the people at OFA would have blinked an eye if you told them that there's a $5 CPM rate for connections beyond the first 100. 140K connections would have been a paltry $700. Obviously, only an analysis of your customer usage patterns would indicate whether you'd impact any serious customers if the basic plan was capped at 100 simultaneous live listeners, with additional tiers for higher peak use. Check out PubNub's pricing model for peak connections as this model makes financial sense: http://www.pubnub.com/pricing http://www.pubnub.com/pricing

eridius 13y ago
You seem to be under the impression that every single customer needs to generate more money via their subscription than they cost in service. That's absolutely not true. You just need enough customers that pay more than they cost such that it covers the costs on the customers that don't. And don't forget that providing an excellent deal to high-usage customers is a great way to encourage them to refer your service to people they know.
jason_tko 13y ago
There is a tremendous benefit of grabbing hold of an opportunity, and doing whatever the hell it takes to strangle the value out of it. Which is what these guys were trying to do. This was such an outlier in terms of standard use cases of their system so far, I think the way they responded was great. There's little value in going back and saying "Ohh... this will cost $700, but it's not written on the website, is that still ok?" and risk dealing with rejection. The value of having POTUS use your service far outweighs the engineering time spent on this. This is now a fantastic leading story for all sorts of marketing efforts and meetings moving forwards, such as this blog post. Calculating the return on this effort through short-term ROI measured in days seems a bit shortsighted.
- biot 13y ago
  I agree that they responded in the only way they could and I hope they can leverage this to greater success. I wasn't referring to retroactively making up bogus prices given that their pricing page specifically says it's "unlimited", even for the Basic free plan. Rather, I'm proposing a hypothetical scenario whereby future subscriber plans are capped for simultaneous connections with an overage rate. Had such a pricing plan existed when OFA initially signed up, I'm speculating that OFA would have happily paid $700 for the extra capacity for the 140,000 simultaneous listeners.

by biot 13y ago

eridius 13y ago

You seem to be under the impression that every single customer needs to generate more money via their subscription than they cost in service. That's absolutely not true. You just need enough customers that pay more than they cost such that it covers the costs on the customers that don't. And don't forget that providing an excellent deal to high-usage customers is a great way to encourage them to refer your service to people they know.

jason_tko 13y ago

There is a tremendous benefit of grabbing hold of an opportunity, and doing whatever the hell it takes to strangle the value out of it. Which is what these guys were trying to do. This was such an outlier in terms of standard use cases of their system so far, I think the way they responded was great. There's little value in going back and saying "Ohh... this will cost $700, but it's not written on the website, is that still ok?" and risk dealing with rejection. The value of having POTUS use your service far outweighs the engineering time spent on this. This is now a fantastic leading story for all sorts of marketing efforts and meetings moving forwards, such as this blog post. Calculating the return on this effort through short-term ROI measured in days seems a bit shortsighted.

biot 13y ago
I agree that they responded in the only way they could and I hope they can leverage this to greater success. I wasn't referring to retroactively making up bogus prices given that their pricing page specifically says it's "unlimited", even for the Basic free plan. Rather, I'm proposing a hypothetical scenario whereby future subscriber plans are capped for simultaneous connections with an overage rate. Had such a pricing plan existed when OFA initially signed up, I'm speculating that OFA would have happily paid $700 for the extra capacity for the 140,000 simultaneous listeners.