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

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

#61

Post by punkpeye »

Forge36 wrote: post #57
punkpeye wrote: post #26

Earlier quoted context omitted.

I am trying to figure out how to scale this to the point where unit economics makes the most sense. If I simply transferred current costs on to the end user, it would be too much. It would be USD 0.20 x number of tests x number of hours, e.g. a company that works 9 to 5 and has 100 tests, that is 0.20 100 8=USD 160 per day. However, changes the more clients you have. If I have 10 clients paying for 100 concurrent tes…

Go with actual costs today. Don't run at a loss "because maybe someday I'll be profitable". What are you charging today? Charge fairly. If you get more customers and improve efficiency again, be honest, "thanks to some improvements in scalability I'm able to reduce your costs to X". You'll also build a long-term relationship by being fair and taking advantage of your customers.

Good advice

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

#62

Post by bequanna »

punkpeye wrote: post #54
bequanna wrote: post #49

Earlier quoted context omitted.

Why are you assuming that you will need to maintain a static infrastructure? Aren’t you able to (fairy quickly) autoscale up/down based on the size of some queue of test requests?

Pooling is not an easy problem. As I have only two clients at the moment who are helping to test this, keeping a hot pool allows me to focus on other feature development while sacrificing some of the costs. Keeping a hot pool makes it a lot easier to immediately start test runs. Run tests, restart browser, clear sessions, return to the pool.

Right, at your current stage there is pry no need to build some task queue. However, if you anticipate infrastructure costs to grow quickly I think you’ll want to invest some effort in this.

You could even have tiered services. For example, some users may be willing to pay more for more consecutive tests.

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

#63

Post by s1k3 »

jahewson wrote: post #53
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…

This is pretty bad advice. Price based off value delivered. If I was a sales person selling this product the first thing I’d want to do is calculate out the value of the time saved. “It pays for itself” is a wonderful proposition - why would I not buy such a product? Not only is it time saved, but it’s more efficient engineering cycles/sprints/etc. If you know your market, you know your price. It’s very easy to A/B S…

Agreed. This is awful advice. You need to be pricing based on value not cost. OP has it right. It’s just the question of how do you peg that value properly.

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

#64

Post by s1k3 »

The only way to figure this out is to go to your clients and give them a price and see how they react. You want to get to the point where they are angry about the price but are still paying.

This is going to be a lot of trial and error and no amount of analyzing is going to give you a good first answer. So start with something you find reasonable (the pricing you mentioned) and see how it goes with your current clients.

If they are totally ok with that then you’re priced too low and on the next sales cycle change it up. If they all balk and threaten to walk away then adjust your price down, until they begrudgingly pay.

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

#65

Post by punkpeye »

OJFord wrote: post #60
punkpeye wrote: post #52

Earlier quoted context omitted.

test minute = test * minute, i.e. 50 tests = USD 1 However, based on everything I've read in this thread, I am leaning towards max parallelization based model, e.g. maximum 50, maximum 100, etc, and charge extra for tests that take longer than 1 minute. This allows straightforward sales while providing most of the value to an avg. client.

I understand the meaning of a 'test-minute', but in OP you said however many tests, it ran under a minute. Not a minute per test. So if that's the case then fine. (But also now there are 'tests that take longer than 1 minute'? It's gone from wow to not really clear what you're offering beyond managed test-running (that's otherwise equivalent to self-hosted) to be honest.) Edit: do you mean they're parallelised, so th…

Yeah, you've got it in the edit.

Using Cypress you are going to have specs and specs will have tests.

You can parallelize Cypress per spec. Meaning that if you had 50 specs and 50 VMs, then your entire test suite will take at most what your longest spec takes.

Most companies are not going to have 50 VMs ready to run tests. However, even if you did, you still have the problem that your tests will run for as long as it takes to run the longest spec, which can be a lot.

I've seen companies try to diminish the latter issue by splitting specs into multiple files. However, that will get you only so far.

So what I do is... I read all your specs, extract individual tests, and spin up VM for each test.

If all your individual tests complete in under a minute, then you will wait at most 1 minute.

However, if there are individual tests that take longer, than yes – you will wait for the longest test to complete.

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

#66

Post by x0x0 »

Silhouette wrote: post #21
x0x0 wrote: post #12

You can price based on eng time saved, but the rejoinder will be that the devs use test time to answer emails, respond in slack/jira, etc. And to some extent that's probably true. I do have some very strong advice on how not to charge: (1) do not charge based on your costs (customers won't care), and (2) do not charge based on fine-grained usage. The latter is important because if a VPE signs a contract for $3k/mo, h…

The latter is important because if a VPE signs a contract for $3k/mo, he/she doesn't want to sit there worrying that devs run a couple extra tests or add a few tests, etc, and boom: all of a sudden the VPE is going to the cfo to explain $10k in overage charges. Counterpoint: I have personally seen companies of the size OP is talking about run into unexpected big jumps in spending on key infrastructure and tooling bec…

Metered: significant internal and external resources are devoted to understanding aws spend. See the whole industry springing up around this, starting with Duckbill. No vpe is looking to add more to that list of things they have to understand and plan out.

Flat rate or bucketed pricing is common across many dev tools. eg ci/cd: see bamboo, gitlab ci/cd (purchased in blocks), circleci (credits w/ account, more credits sold in blocks). apms like honeycomb.io. etc.

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

#67

Post by jacknews »

Your pricing sounds ambitious considering something like Autocad, which is a primary tool, costs about $2000/year, and you plan to charge $3000/month?

Since this is essentially a cost-saving thing, I don't think it's realistic to try to charge the cost saved. If I as a customer can save $100/day by using your software, but your software costs $100/day, why bother?

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

#69

Post by punkpeye »

jacknews wrote: post #67

Your pricing sounds ambitious considering something like Autocad, which is a primary tool, costs about $2000/year, and you plan to charge $3000/month? Since this is essentially a cost-saving thing, I don't think it's realistic to try to charge the cost saved. If I as a customer can save $100/day by using your software, but your software costs $100/day, why bother?

Good point – it should be phrased as improved productivity. You have to think more broadly.

You are not only saving engineer time. By delivering more in a shorter amount of time, you have compounding effects across the entire organization.

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

#70

Post by punkpeye »

bb88 wrote: post #68

Have you thought about approaching cypress and selling it for $1-2M dollars (after patenting it first of course)

I like to hack this problem. Maybe once I get bored if there is demand. For now, I enjoy the challenge of figuring out how to make it work and scale.
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