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In rough order of difficulty/startup cost: - AWS reserved instances (doesn't help with storage costs though) - dedicated servers at e.g. SoftLayer - colocation
There are _a lot_ of dedicated options. In terms of price, Softlayer's at the high end. If Softlayer gives you a price/performace improvement over AWS of 2.5x, you can get another 2-3x that by picking a cheap (but not necessarily bad!) provider.
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Or simply take those $30k and get some colocation and hardware - get the monthly operational costs down to sub-$10k easily. It strikes me every time how much money people sink down on Amazon(AWS) when they can do it themselves for a lot less. The usual counter-argument is "but we didn't have money for a sysop", well yeah - your devs/devops needs to manage the AWS system as well, it's not much harder to manage real ha…
People keep saying this, and I can see how it's easily true if we're talking about EC2 or one of Amazon's database services. But what's the hardware equivalent of S3 (the majority of the costs in this case) that's cheaper and "not much harder to manage" than S3? I feel like once you want to get past a couple TB of (redundant!) storage in colo/dedicated you're back to the land of sysops, no? I mean, I am decently comf…
The elephant in the room that nobody is talking about here is they gave away too much. They could have adjusted their freemium model. Why not contact people using a lot of resources ? Let them know the best way to keep the services up at the current clip is for them to start paying.
Also I don't get why it disappeared from one day to the next... Couldn't they massively restrict free usage? Or have some form of donation/fund raising à la Reddit Gold? people were attached to the product and it was disappointing to see it just go away /rant
I did some spreadsheet-ing to look at the "profitability" of their userbase. If the business were sustainable, then Monthly Recurring Revenue [1] would be higher than the cost to service the customers [2]. If not, then growing the userbase just increases total monthly losses (assuming a steady freemium conversion rate). In Everpix's case, it appears they were growing unsustainably. Their data shows that all the way u…
Your analysis is certainly logical, but with all due respect relies on the faulty assumption that Everpix's infrastructure, responsible for almost all of variable costs, was somehow "frozen". The reason we were getting closer and closer to being positive on variable costs (looking at revenues on a sales recognition basis, since from the sales volume perspective, things were already positive in the last few months) is…
My attempted point was just that during the lifetime of the company, growing the userbase was increasing burn rather than decreasing it. That's a normal VC-funded approach to things, and occasionally works dramatic wonders like Facebook. But in the case of Everpix, the negative operating margin helps explain why an exponentially growing, paying(!) userbase can still fall apart without additional funding.
Btw, I really appreciate you guys being willing to share all these numbers. Very brave, and extremely fascinating. Best of luck in your next endeavors!
Earlier quoted context omitted.
There are _a lot_ of dedicated options. In terms of price, Softlayer's at the high end. If Softlayer gives you a price/performace improvement over AWS of 2.5x, you can get another 2-3x that by picking a cheap (but not necessarily bad!) provider.
Please provide links to these providers you speak of.
Over the years, I've had good experience with WebNX which has good connectivity to Asia. They've been supposed to open a NY location for a while now...Speaking of NY, there's reliablesite.net which is ok. You have Hivelocity in Florida (which I didn't use specifically for South America, but I imagine they'd be good for that).
There's a handful of companies which I've never used but that I've been hearing good things about for years. NetDepot, SingleHop and LimeLight Networks for example.
I have used 100TB in both Singapore and Washington. They are a Softlayer reseller. The extra level of indirection sucks when something goes bad, but they are much cheaper (what you can get from 100TB for $400 might cost $1200 at Softlayer). A few of the locations they actually have staff at, so I imagine that's much better.
I recommend you spend some time on webhostingtalk.com. It's great. There's a forum specifically for deals which can be useful to pick something up.
For anyone who's only familiar with AWS/clouds: most of these take 1-2 days to set up machines, their control panels are horrible, they don't have an API and you might not even get a dedicated KVM switch.
Wow, I feel like a huge advertising billboard this morning!
Why is the main focus on Aws costs when in comparison the HR costs are multiple of the Aws costs? Is it because were too technically minded here? Is it cause the charts in the article only showed the Aws costs whereas including the HR costs would have changed that perception. I don't know but i just keep seeing people focus on the Aws cost which was not the real problem in comparison. It makes me think of bad pre-opt…
The technical costs are not damning. Where is the concern about the other costs, which aren't being picked apart? If AWS was 0, it's still unsustainable growth until someone (swisspol?) dispels our concern there.
Another big void is who was pulling the plug and how/what are the founders and direct employees feeling? I'd like to know if there were ship-abandoners, etc.
What is the turning point and what were they decision makers watching that caused the shift?
This doesn't look like a technical learning here. This looks like a business learning. So, while they're being transparent and it's still fresh :) share.
We can A/B test buttons. How do you A/B test business decisions?
It looks like a bunch of people can armchair this thing, technically, to the point where it makes me wonder if someone could NOT take on nearly the funding and make the $100M company on this idea with just some bootstrapping.
Also... how was there not a pricing model that scaled with use?
Well, the lack of investors was surely a big symptom of their failure but the cause it was not.
When you burn > $2 million in funding ($200k alone in PR and "Promotional Expenses" as their spreadsheet shows) and still can't get through the timid mark of 50 thousand users, then maybe there is something very wrong with your business model that you should think about.
I'm confident that's something that crossed all the investors minds during the series A conversations. They didn't mention that fact directly because it could sound too harsh or rude and they wanted to keep the relationship in good spirits, obviously.
The startup game is tuff, no doubt about it. I hope the Everpix guys learn their lesson and to better next time, they look like cool and competent people.
Do startups at a similar stage usually measure things as diligently as Everpix seem to have done? If they kept an eye on of all this on a monthly or weekly basis while they were still running would they have been doing too much or too little? I've worked with some organisations that are reluctant to invest in this level of analysis. Some of them might even now say "It didn't help Everpix to spend time on that stuff."
Do startups at a similar stage usually measure things as diligently as Everpix seem to have done?
Frequently, no. There exist companies with revenue in the $X0 million range who have less numbers floating around the company. You'd be surprised.
If they kept an eye on of all this on a monthly or weekly basis while they were still running would they have been doing too much or too little?
I'm going to respectfully decline to answer counterfactuals about someone else's business. In general, software businesses have two tasks: Make software. Sell software. Analytics is a very useful thing to have if it lets you accomplish one of those two tasks. There are many software businesses at which it does. There are some at which it does not.