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Launch HN: Lago (YC S21) – Open-source usage-based billing

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Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#101

Post by AnhTho_FR »

super256 wrote: post #25
rabidonrails wrote: post #2

Congrats on the launch, definitely an interesting product and really interesting space. But...didn't you guys launch a while ago? Is there something specific you're launching now? >> The tech stack we use to build Lago (YC S21), the open source billing API ( https://news.ycombinator.com/item?id=32438355 ) >> Lago: The Open Source Stripe Billing Alternative ( https://news.ycombinator.com/item?id=32438355 ) >>Lago: The…

Might be interesting for some: https://youtube.com/watch?v=3xU050kMbHM&feature=shares YC video about launching and launching again.

Yes, it's definitely very YC to work on multiple launches. Intercom wasn't YC backed but they actually launched a dozen times!

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#102

Post by leonidasv »

harrylucas wrote: post #42
rvz wrote: post #29

Earlier quoted context omitted.

Yes. AGPL is a great choice and counters SaaS companies that are trying to grift and abuse open-source with a modified competing product without contributing back.

I always get confused with AGPL and seems to have differing opinions online, so wanted to ask here. If I use Lago in my app, and don't change it all, do I need to opensource my entire application?

If you don't change the source code of Lago, then you don't. Having your app call it via REST, for example, is fine.

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#103

Post by perlgeek »

telecuda wrote: post #61

Congrats! We built a usage-based telephony (voice & sms) billing system for our customers and appreciate the pain. Not to take anything away from your launch, but founders / product managers should carefully consider if usage-billing (even with a tool like Lago) is best for your business and customers. We started as usage-based then learned a few years in (once we understood customer usage trends - key) that customer…

I work at an IT service provider that also offers some cloud products.

Customers start out by wanting all the flexibility (for their devs, usually) to spin up their owner servers, and want used-based billing. It would be a waste to pay more, no?

Then their own book keeping department yells at them, because they use SAP, and every bill that differs from the contract or the previous month is sheer hell and requires 5 levels of approval / justification / whatever.

So the next iteration is that they buy a fixed contingent of "cloud points" per month so that the invoice remains constant, and there's reporting and/or a firm (but often unwritten) promise from the account manager that they'll notify the customer if/when they ever run the risk of exceeding their contingent.

In really big / inflexible companies, it really seems to be easier for the purchasing managers to justify higher but constant prices than variable prices. The inefficiency boggles the mind.

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#104

Post by AnhTho_FR »

perlgeek wrote: post #103
telecuda wrote: post #61

Congrats! We built a usage-based telephony (voice & sms) billing system for our customers and appreciate the pain. Not to take anything away from your launch, but founders / product managers should carefully consider if usage-billing (even with a tool like Lago) is best for your business and customers. We started as usage-based then learned a few years in (once we understood customer usage trends - key) that customer…

I work at an IT service provider that also offers some cloud products. Customers start out by wanting all the flexibility (for their devs, usually) to spin up their owner servers, and want used-based billing. It would be a waste to pay more, no? Then their own book keeping department yells at them, because they use SAP, and every bill that differs from the contract or the previous month is sheer hell and requires 5 l…

This is really what we've observed indeed! The companies catering to later stage companies prefer to offer prepaid credits to their end users, or annual plans paid in advance that includes some prepaid usage than a full, non predictable usage based pricing. I think in that case it's preferable for the end user, but also for the company, as their finance team can have more visibility on the upcoming revenue streams.

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#105

Post by codegeek »

telecuda wrote: post #61

Congrats! We built a usage-based telephony (voice & sms) billing system for our customers and appreciate the pain. Not to take anything away from your launch, but founders / product managers should carefully consider if usage-billing (even with a tool like Lago) is best for your business and customers. We started as usage-based then learned a few years in (once we understood customer usage trends - key) that customer…

I run a SAAS and whenever we try to implement usage based billing, it is a lot of work to educate the customer on how it will work. I think this is more of a business than technical problem. Like you said, usage based billing has its places (perhaps if you sell to technical/dev focussed products. e.g. Metered API) but if you work with customers that are more B2B and have to answer to their procurement/finance/accounting departments, fixed cost is always easier to sell. Even if that means they end up paying more overall.

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#106

Post by codegeek »

Rafsark wrote: post #36
nylonstrung wrote: post #31

How do you guys differ from Lotus, the other YC open-source usage based billing company?

Hi, First of all, we launched our open source billing repository months before they did. In fact, they even reached out to us for inspiration. This could be related to the fact that our team has prior experience building billing engines, so we have a better understanding of the space. From a product perspective, our coverage is more extensive. We provide more advanced coupons, usage-based components and billing use-c…

"Months before they did". That doesn't mean anything. Being first is not always why you are better. Myspace was first. Friendster was first. Alta vista was first. Lycos was first.

Focus on why your product is better or different and not these factors like who was early, who has more experience with billing engines etc because again, experience doesn't translate to success necessarily.

All the best.

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#108

Post by AnhTho_FR »

codegeek wrote: post #105
telecuda wrote: post #61

Congrats! We built a usage-based telephony (voice & sms) billing system for our customers and appreciate the pain. Not to take anything away from your launch, but founders / product managers should carefully consider if usage-billing (even with a tool like Lago) is best for your business and customers. We started as usage-based then learned a few years in (once we understood customer usage trends - key) that customer…

I run a SAAS and whenever we try to implement usage based billing, it is a lot of work to educate the customer on how it will work. I think this is more of a business than technical problem. Like you said, usage based billing has its places (perhaps if you sell to technical/dev focussed products. e.g. Metered API) but if you work with customers that are more B2B and have to answer to their procurement/finance/account…

This really resonates with our observations. I think it's a "business" problem first (pricing) indeed and a technical one (once you've decided on pricing). Your insights are why're very bullish on "hybrid" pricings: usage subscriptions, fixed costs that can be overaged but with prepaid packages or prepaid credits. In that case, the end-user still gets the "we pay what we use", while there's predictability/peace of mind on the final bill (you can't exceed what you prepaid).

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#109

Post by superzamp »

epberry wrote: post #79
candiddevmike wrote: post #5

I think this is going to be/already is a crowded space. SaaS companies are feeling the burn of layoffs due to per-seat pricing, so metered billing seems like a good alternative. Unfortunately, as a SaaS consumer, I despise it, as it's meant to be obtuse and hard to estimate, plus I have yet to see any SaaS/IaaS offer real spend controls like stopping the service.

I don't necessarily think that billing which is hard to estimate is good for anyone. For large deals I've seen this be a real turn off. Same with surprise bills. Ultimately if the service can scale billing in a way that their value scales to the customer (Datadog and Snowflake come close to this) then both the provider and the customer will be happy.

Side story, and that might not be true as of today, but Datadog was a nightmare billing-wise for me. Probably precisely because they didn't use a tool like the one launched in this post. Anything ranging from seeing your live usage to getting a rough idea of what your bill at the end of the month would be was impossible, not to mention the absence of any kind of alert even after reaching $30x our previous month usage. Usage based is fantastic when done properly, but can quickly turn to a nightmare for the user on half-assed systems.

Re: Launch HN: Lago (YC S21) – Open-source usage-based billing

#110

Post by AnhTho_FR »

nonethewiser wrote: post #107

How are you able to build something like this while only paying engineers 50k/yr? https://www.ycombinator.com/companies/lago/jobs

The job post includes a range: $50K-100K and the location is set to "Bogota / Paris". I had researched compensations in these markets and the range seemed relevant. We definitely pay competitive salaries, place the bar quite high and adjust it based on the candidates we meet.
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