Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: How to price a service that saves hundreds of engineering hours?

news.ycombinator.com

Post reply on HN
Print view View original

31–40 of 89 posts

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#31

Post by zmgsabst »

Silhouette wrote: post #13
codingdave wrote: post #2

It is an interesting idea, but your approach to pricing seems off: 100/day is not reasonable, at least not for small/medium teams. Trying to do arithmetic on run times and hourly rates to convince people it is reasonable is not only overly simplistic, but actively distracts from the conversation you really want to have - how does your solution solve their problem? People buy when they believe you can solve a problem…

100/day is not reasonable. If I'm understanding OP correctly then at that level this tool would be saving the customer's engineers 14 minutes of disruptive downtime 100 times per day. If that's correct then $100/day may indeed be unreasonable, but because it's way too low. I doubt the useful target market for a tool like this is in the $20/month or even $100/month category. What does a series A/B company that runs 10…

Okay — but running 60 copies of a small EC2 for 1 min is $0.009 to $0.04

Running 100x test suites would be $0.90 to $4, in server costs.

Charging 25-100x the server costs is optimistic, at best.

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#32

Post by punkpeye »

Silhouette wrote: post #24
punkpeye wrote: post #19

Earlier quoted context omitted.

Speaking from experience, the promise of completing tests in 1 minute or less is very appealing. This is one thing I don't want to compromise. In the case of the two companies that are helping me to test this service, they both pay a fixed fee of USD 2000 for an agreed maximum parallelization of 50 browsers. This means that up to 50 concurrent tests, I can still deliver the promise of 1 minute tests. For context, Bro…

Speaking from experience, the promise of completing tests in 1 minute or less is very appealing. Indeed. There is a qualitative difference between tests completing fast enough that a dev is OK with just waiting a few seconds for the results and tests becoming a "go do something else for a while" background activity. There is also a qualitative difference between tests running fast enough that if something does go wro…

Another thing to consider is that most engineers do not run all integration tests locally before committing them, simply because they take long time, i.e. A typical workflow is: commit changes -> raise a PR -> wait for all tests to complete -> [if tests fails, go back to step 1] This hugely impacts developer ability to switch context, because they need to stash code, switch branches, etc.

If all integration tests could complete in pre-push commit hook (which is reasonable if they take less than a minute), then we would dramatically reduce the context switching involved in day to day engineering.

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#33

Post by bequanna »

Forge36 wrote: post #16

Ask your customers. Propose your current amount and be honest "do you think this is fair?" If they say yes great! If not, ask what they think is reasonable. Set yourself a lower limit to keep it profitable for yourself. "Sorry I can't price it below X". See how they respond.

This is great advice for a startup trying to figure out pricing!

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#34

Post by tasuki »

issa wrote: post #7

Just to use your example, you would have a VERY hard time convincing me to spend $3,000 a month to speed up testing time. Running tests isn't exactly dead time. It gives engineers a break, they can think about other things while running them, get coffee, etc. There is DEFINITELY value there, but not $3k a month worth. That said, pricing correctly is hard and requires a lot of experimentation. Growth and adoption migh…

From my experience, it depends...

Is this a test suite I run during my development cycle? If so, I get distracted if it takes more than half a minute, open HN, and lose a bunch of time.

Is this a test suite that runs once I open a pull request? It can run an hour or two, I don't mind. I'll move on to the next thing and check tomorrow morning if it's passed. If it failed I start my day by investigating why. I care very little about speed here.

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#35

Post by punkpeye »

zmgsabst wrote: post #31
Silhouette wrote: post #13

Earlier quoted context omitted.

100/day is not reasonable. If I'm understanding OP correctly then at that level this tool would be saving the customer's engineers 14 minutes of disruptive downtime 100 times per day. If that's correct then $100/day may indeed be unreasonable, but because it's way too low. I doubt the useful target market for a tool like this is in the $20/month or even $100/month category. What does a series A/B company that runs 10…

Okay — but running 60 copies of a small EC2 for 1 min is $0.009 to $0.04 Running 100x test suites would be $0.90 to $4, in server costs. Charging 25-100x the server costs is optimistic, at best.

Unfortunately, EC2 is not an option if we want to deliver 1 minute promise. I need VMs that I can flash start with all the software needed to run the tests immediately available. The best I was able to achieve is 20 seconds using my current provider. However, they charge in hour increments.

That being said, I am constantly experimenting how to reduce costs. I think the final result is going to be a fairly complicated orchestration of pre-booted machines that are rented by month and those that we spin up ad-hoc to handle demand fluctuation.

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#36

Post by clearcarbon »

If you want to target the sme's I might suggest just separating out your value, set a few simple tiers and make it easy to plug a cloud backend in (only needs one provider at first). This way your value and cost is direct and obvious and you're not left managing a fleet of vm's. This probably increases the total cost a little as there's less sharing, but a lot of medium org's can manage that internally and it's much easier to convince a manager to spend $xx/$xxx a month rather than $xxxx or more

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#37

Post by Silhouette »

zmgsabst wrote: post #31
Silhouette wrote: post #13

Earlier quoted context omitted.

100/day is not reasonable. If I'm understanding OP correctly then at that level this tool would be saving the customer's engineers 14 minutes of disruptive downtime 100 times per day. If that's correct then $100/day may indeed be unreasonable, but because it's way too low. I doubt the useful target market for a tool like this is in the $20/month or even $100/month category. What does a series A/B company that runs 10…

Okay — but running 60 copies of a small EC2 for 1 min is $0.009 to $0.04 Running 100x test suites would be $0.90 to $4, in server costs. Charging 25-100x the server costs is optimistic, at best.

Software and infrastructure companies charge huge multiples of the hosting costs of providing their products and services all the time. The value they add isn't just leasing a VM on your behalf.

Re: Ask HN: How to price a service that saves hundreds of engineering hours?

#40

Post by punkpeye »

patio11 wrote: post #30

At Series A / Series B, they can’t think about serious commitments (and this sounds like one) in increments smaller than $10k. I’d try that and, if you get any pushback, ask what it would have to do to be worth $10k. (A month. Bill quarterly or yearly at their option; raise prices annually to capture increase in use.) Remember that their alternative is not “spin up VPSes” it is “staff an engineering rotation to maint…

For context, they were previously using BrowserStack and paying USD 999. As far as I know, they are using both services at the moment in parallel (mostly because of their year long commitment and other services that BrowserStack provides to them that fall out of scope).

We already agreed to discuss the idea of doubling the capacity.

Post reply on HN