5 ms·

It would be interesting to go back through the Everpix post mortem docs[1] and see if a big price swing like this could have put them in the black (or close to

It would be interesting to go back through the Everpix post mortem docs[1] and see if a big price swing like this could have put them in the black (or close to it). [1] https://github.com/everpix/Everpix-Intelligence https://github.com/everpix/Everpix-Intelligence

mkempe 13y ago
I had the same thought. Their last Amazon bill was $35k. I don't think saving $10-20k/month would have made a significant difference. They had many freemium users, and were not adding customers at a sufficiently high growth rate over the life of the company. They were trying to raise $5m.
- eldavido 13y ago
  The importance of this depends on unit economics. For businesses with historically tight margins (e.g. retail), small swings in input prices (labor, cost of goods) can make or break profitability. Whereas software, if you're doing it right, should have much higher margins. Sidenote: I'd be very curious to know what the "typical SaaS business" has as its gross margin, factoring in all sales against "cost of goods": servers, bandwidth, operations, etc.
  - opendais 13y ago
    80% seems to be the common 'educated guess' number: http://www.quora.com/What-should-be-the-typical-gross-margin-for-a-SaaS-startup http://www.quora.com/What-should-be-the-typical-gross-margin... http://www.forentrepreneurs.com/saas-metrics-2-definitions/ http://www.forentrepreneurs.com/saas-metrics-2-definitions/ http://www.forbes.com/sites/jjcolao/2012/10/02/running-a-saas-business-answer-these-four-questions/ http://www.forbes.com/sites/jjcolao/2012/10/02/running-a-saa...
opendais 13y ago
It might have been enough for them to keep investor interest [new round of funding] and continue. It wouldn't have put them in the black. https://github.com/everpix/Everpix-Intelligence/blob/master/Financials.md https://github.com/everpix/Everpix-Intelligence/blob/master/... From that, it looks like their loss over 26 months was ~$300,000. Their total AWS costs was less than $400,000 over the same period. Downloading 1 GB = 4x the cost of the S3 storage at the reduced prices. If everything is viewed once [doubtful], that is 4x the price of the S3 storage. Given that ti would be impossible to reduce the total cost by even 50%, let alone the 75% they'd need to break approximately even. I didn't see S3 broken out specifically anywhere which is why I'm just making an educated guess. :/
- hahahafail 13y ago
  very cool repository, found the S3 data here: https://github.com/everpix/Everpix-Intelligence/blob/master/Internal%20Metrics/System%20AWS%20Costs%20(S3%20TiB%20per%20Month).csv https://github.com/everpix/Everpix-Intelligence/blob/master/... So basically at their peak, they had ~174TB S3 and ~47TB S3 RRS. That month cost them ~$16.2k, whereas after April 1 they could have put everything in S3 for ~$6.7k. That's a big difference, but they were still getting taken to the cleaners over some other services like RDS.
  - opendais 13y ago
    Cool. So they had roughly (with rounding): RRS: 2+3+6+8+9+18+19+22+27+34+42+48+7=~245 TB/months=~ Normal: 7+9+13+19+24+46+56+65+76+95+123+153+174+25=~885 TB/months Difference: $0.085-$0.0300=$0.055 $0.068-$0.0240=$0.044 End: 0.055 * 885 * 1024=$49,843 0.044 * 245 * 1024=$11,039 $49,843+$11,039=~$60k saved which is 20% of what they were short, if they had started with April 1st's pricing. If you can reduce the AWS $400k by 40% due to the reduced pricing for EC2, you'd still fall short.
  - hrrsn 13y ago
    Why wouldn't they put all of that in a Backblaze Storage Pod? 2 months of AWS costs could've built more than 2 pods and stored everything with plenty of space to spare.
    - tiquorsj 13y ago
      Price out the backup solution for that back blaze. Then make the backblaze geograohiclly redundant. Then write the system to keep them in sync. Then add versioning. Then pay for someone to manage it. Now you are getting towards the real cost of that backblaze to replace S3.
      - herokusaki 13y ago
        >Then write the system to keep them in sync. Then add versioning. Are there any ready-to-deploy solutions for this?
deleted 13y ago
[deleted]
seanmccann 13y ago
That's no different than startups of the past having to pay thousands to millions of dollars to setup servers. These days those same servers can be setup in minutes for a fraction of the cost. Timing is everything. Sometimes the current market pricing for a commodity is too expensive to make your business viable today but in the future that will not be the case. Just depends how long that will take.
- theDoug 13y ago
  Fully agree. Most of what makes any startup work in the first place is that time + money + technology have finally aligned for them to start their idea.
- computer 13y ago
  If S3 storage pricing was the issue for this startup they could always have gone with their own dedicated servers for storage for a fraction of the cost. For that reason, I doubt a lower S3 cost would have prevented them from shutting down.
  - rjurney 13y ago
    Fraction of the cost long-term. Not short term, where they found themselves.
    - vidarh 13y ago
      Renting dedicated servers with lots of disk has typically been vastly cheaper than S3 "forever" on a monthly contract basis, so there are plenty of options before going the route of bare metal in your own rack. But even renting space by the 1U and leasing servers directly adds surprisingly little overhead.
      - toomuchtodo 13y ago
        http://blog.backblaze.com/2014/03/19/backblaze-storage-pod-4/ http://blog.backblaze.com/2014/03/19/backblaze-storage-pod-4...
jpatel3 13y ago
Its one of the factor, but it's not the only thing which can put them in the black.
davyjones 13y ago
A miss is as good as a mile.

mkempe 13y ago

I had the same thought. Their last Amazon bill was $35k. I don't think saving $10-20k/month would have made a significant difference. They had many freemium users, and were not adding customers at a sufficiently high growth rate over the life of the company. They were trying to raise $5m.

eldavido 13y ago
The importance of this depends on unit economics. For businesses with historically tight margins (e.g. retail), small swings in input prices (labor, cost of goods) can make or break profitability. Whereas software, if you're doing it right, should have much higher margins. Sidenote: I'd be very curious to know what the "typical SaaS business" has as its gross margin, factoring in all sales against "cost of goods": servers, bandwidth, operations, etc.
- opendais 13y ago
  80% seems to be the common 'educated guess' number: http://www.quora.com/What-should-be-the-typical-gross-margin-for-a-SaaS-startup http://www.quora.com/What-should-be-the-typical-gross-margin... http://www.forentrepreneurs.com/saas-metrics-2-definitions/ http://www.forentrepreneurs.com/saas-metrics-2-definitions/ http://www.forbes.com/sites/jjcolao/2012/10/02/running-a-saas-business-answer-these-four-questions/ http://www.forbes.com/sites/jjcolao/2012/10/02/running-a-saa...

opendais 13y ago

It might have been enough for them to keep investor interest [new round of funding] and continue. It wouldn't have put them in the black. https://github.com/everpix/Everpix-Intelligence/blob/master/Financials.md https://github.com/everpix/Everpix-Intelligence/blob/master/... From that, it looks like their loss over 26 months was ~$300,000. Their total AWS costs was less than $400,000 over the same period. Downloading 1 GB = 4x the cost of the S3 storage at the reduced prices. If everything is viewed once [doubtful], that is 4x the price of the S3 storage. Given that ti would be impossible to reduce the total cost by even 50%, let alone the 75% they'd need to break approximately even. I didn't see S3 broken out specifically anywhere which is why I'm just making an educated guess. :/

hahahafail 13y ago
very cool repository, found the S3 data here: https://github.com/everpix/Everpix-Intelligence/blob/master/Internal%20Metrics/System%20AWS%20Costs%20(S3%20TiB%20per%20Month).csv https://github.com/everpix/Everpix-Intelligence/blob/master/... So basically at their peak, they had ~174TB S3 and ~47TB S3 RRS. That month cost them ~$16.2k, whereas after April 1 they could have put everything in S3 for ~$6.7k. That's a big difference, but they were still getting taken to the cleaners over some other services like RDS.
- opendais 13y ago
  Cool. So they had roughly (with rounding): RRS: 2+3+6+8+9+18+19+22+27+34+42+48+7=~245 TB/months=~ Normal: 7+9+13+19+24+46+56+65+76+95+123+153+174+25=~885 TB/months Difference: $0.085-$0.0300=$0.055 $0.068-$0.0240=$0.044 End: 0.055 * 885 * 1024=$49,843 0.044 * 245 * 1024=$11,039 $49,843+$11,039=~$60k saved which is 20% of what they were short, if they had started with April 1st's pricing. If you can reduce the AWS $400k by 40% due to the reduced pricing for EC2, you'd still fall short.
- hrrsn 13y ago
  Why wouldn't they put all of that in a Backblaze Storage Pod? 2 months of AWS costs could've built more than 2 pods and stored everything with plenty of space to spare.
  - tiquorsj 13y ago
    Price out the backup solution for that back blaze. Then make the backblaze geograohiclly redundant. Then write the system to keep them in sync. Then add versioning. Then pay for someone to manage it. Now you are getting towards the real cost of that backblaze to replace S3.
    - herokusaki 13y ago
      >Then write the system to keep them in sync. Then add versioning. Are there any ready-to-deploy solutions for this?

deleted 13y ago

[deleted]

seanmccann 13y ago

That's no different than startups of the past having to pay thousands to millions of dollars to setup servers. These days those same servers can be setup in minutes for a fraction of the cost. Timing is everything. Sometimes the current market pricing for a commodity is too expensive to make your business viable today but in the future that will not be the case. Just depends how long that will take.

theDoug 13y ago
Fully agree. Most of what makes any startup work in the first place is that time + money + technology have finally aligned for them to start their idea.
computer 13y ago
If S3 storage pricing was the issue for this startup they could always have gone with their own dedicated servers for storage for a fraction of the cost. For that reason, I doubt a lower S3 cost would have prevented them from shutting down.
- rjurney 13y ago
  Fraction of the cost long-term. Not short term, where they found themselves.
  - vidarh 13y ago
    Renting dedicated servers with lots of disk has typically been vastly cheaper than S3 "forever" on a monthly contract basis, so there are plenty of options before going the route of bare metal in your own rack. But even renting space by the 1U and leasing servers directly adds surprisingly little overhead.
    - toomuchtodo 13y ago
      http://blog.backblaze.com/2014/03/19/backblaze-storage-pod-4/ http://blog.backblaze.com/2014/03/19/backblaze-storage-pod-4...

jpatel3 13y ago

Its one of the factor, but it's not the only thing which can put them in the black.

davyjones 13y ago

A miss is as good as a mile.