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Algolia raises $110M for its search-as-a-service

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Re: Algolia raises $110M for its search-as-a-service

#31

Post by tomnipotent »

mlthoughts2018 wrote: post #21
apalmer wrote: post #19

Earlier quoted context omitted.

You are absolutely factually correct in your analysis, but you are completely missing how business works. Fundamentally, there is value to most businesses in being able to just buy a decent solution to a non core competency. That’s where Algolia and AWS and basically all service companies come in... a medium scale clothing manufacturer with a booming e-commerce site may well know they have no clue how to do search, a…

I’m saying in my experience there is no such thing as one singular “decent solution” for search. It varies enormously from use case to use case, customer cohort to customer cohort, etc. To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. I think the fundamental myth, just like with…

> you’d already have to hire pretty much all the same staff

This is terribly wrong. It's like saying you need as many people to setup Solr/ElasticSearch as you'd need to build a custom search engine.

It requires considerably fewer people to setup, manage, and optimize Algolia than it does to setup, manage, and optimize ES.

Case in point, Twilio.

Re: Algolia raises $110M for its search-as-a-service

#32

Post by sniperjzp »

faceshapeapp wrote: post #23
sniperjzp wrote: post #22

Earlier quoted context omitted.

It feels ironic, I searched "Algolia" from both, today's news is ranked as #7 in Algolia powered HN. From Algolia: https://imgur.com/a/atRMnwj From Google: https://imgur.com/a/d3EKdUp Some people says it's popularity based, but if I change it to date based, it's broken? https://imgur.com/a/HGzL6fO

Simply sorting by date doesn't really seem to be that useful either. For example, the poster below showed the following link for the "ml" query: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... . If you look at the results, the first 2 results only matched part of the poster's username and many of the top results here are empty threads which are not that useful since HN is mostly for discussions. To be…

️ oops, a typo in the query, but why they have query correction for popularity based, not date based?

Re: Algolia raises $110M for its search-as-a-service

#34

Post by [deleted] »

mlthoughts2018 wrote: post #21
apalmer wrote: post #19

Earlier quoted context omitted.

You are absolutely factually correct in your analysis, but you are completely missing how business works. Fundamentally, there is value to most businesses in being able to just buy a decent solution to a non core competency. That’s where Algolia and AWS and basically all service companies come in... a medium scale clothing manufacturer with a booming e-commerce site may well know they have no clue how to do search, a…

I’m saying in my experience there is no such thing as one singular “decent solution” for search. It varies enormously from use case to use case, customer cohort to customer cohort, etc. To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. I think the fundamental myth, just like with…

[deleted]

Re: Algolia raises $110M for its search-as-a-service

#35

Post by mlthoughts2018 »

tomnipotent wrote: post #31
mlthoughts2018 wrote: post #21

Earlier quoted context omitted.

I’m saying in my experience there is no such thing as one singular “decent solution” for search. It varies enormously from use case to use case, customer cohort to customer cohort, etc. To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. I think the fundamental myth, just like with…

> you’d already have to hire pretty much all the same staff This is terribly wrong. It's like saying you need as many people to setup Solr/ElasticSearch as you'd need to build a custom search engine. It requires considerably fewer people to setup, manage, and optimize Algolia than it does to setup, manage, and optimize ES. Case in point, Twilio.

You’re not even addressing the engineering costs though. The portion of cost of a search engine solution attributable to the set up of Elastic Search is basically zero. The cost is understanding if the search surfaces relevant items for the specific use case, including asymmetric costs for surfacing bad items in many use cases. Not to mention that plug and play third party solutions like Solr / ES are highly inapplicable to a lot of use cases.

Re: Algolia raises $110M for its search-as-a-service

#36

Post by mlthoughts2018 »

skybrian wrote: post #28
mlthoughts2018 wrote: post #21

Earlier quoted context omitted.

I’m saying in my experience there is no such thing as one singular “decent solution” for search. It varies enormously from use case to use case, customer cohort to customer cohort, etc. To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. I think the fundamental myth, just like with…

It seems like companies don't have to evaluate it your way? They could informally try it out on a few searches and say, "seems to work better than the other one." This is how Google became popular. Or maybe do an A/B test. It's a little more formal but doesn't require any search-specific knowledge either.

This approach typically fails quite bad in practice. The subjective impression of success depends on the people around at the time of the decision and the set of queries they chose to inspect. As corner cases pop up with significant cost in production (e.g. surfacing nudity in an image search for a query where it’s highly inappropriate) you become less and less capable of understanding why or hacking business logic in to an already brittle system.

The same problem appears for A/B testing different result orderings. It all hinges on the metrics you chose. If you only looked at e.g. top 5 click through rate, and then later a page redesign brings the top 10 results above the fold, and 6-10 are garbage, you’re suddenly screwed with no systematic way to adjust underlying parameters of the search model that control these things, or really even to get analytics data about it because you felt you could just outsource to a place like Algolia and not have in-house expertise, or that some engineers without statistics backgrounds could just hack it.

Re: Algolia raises $110M for its search-as-a-service

#37

Post by mlthoughts2018 »

hnaccy wrote: post #24
mlthoughts2018 wrote: post #21

Earlier quoted context omitted.

I’m saying in my experience there is no such thing as one singular “decent solution” for search. It varies enormously from use case to use case, customer cohort to customer cohort, etc. To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. I think the fundamental myth, just like with…

>To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. You just have to pay Algolia, wire up the APIs, and then see if whatever stakeholder that was complaining about search stops complaining. If they do then it's good enough.

Totally false. This is like massively overfitting a high-order polynomial regression to your data. The fit looks good enough, then the next data point comes in and breaks in a way the existing model cannot be hacked to account for.

The search results you believed were implicitly tuned to some feedback mechanism slowly experience creep as the customer cohort changes and data distribution changes until before you knew it your management of the search solution is a ceaseless game of whack-a-mole siphoning off engineering resources at a rapidly increasing rate. It’s the same false promise of just having some engineers stand up Elastic Search.

Re: Algolia raises $110M for its search-as-a-service

#38

Post by adventured »

It's interesting to see this valuation on search as a service, given the leader, Elastic, is in obvious valuation trouble. The market is unimpressed: the Elastic stock hasn't net moved higher since mid January (so most of the time they've been public).

Just take a look at the actual business performance of Elastic.

$271m in sales for the last fiscal year. Negative $101 million operating loss. Pretty bad, although not extremely unusual for SaaS companies in high growth mode. So there must be great growth going on, right? No.

They added a mere $9m in sales last quarter. $89m in sales with a $42m operating loss (whoa). They added an additional $10m in operating loss and gained a mere $9m in sales.

So if they can keep up that rate of growth, they might generously add $45-$50 million in sales this year. Maybe 16%-18% growth for a company bleeding red ink, that isn't particularly large in terms of sales yet (ie they're struggling to generate fast growth at a small'ish scale). And all that needs to support trading for 20 times sales on a business that is a decade old and has never produced a profit.

Either they find a lot of growth soon or in the next market down cycle Elastic is worth 1/3 to 1/2 of what they're trading for now. The same will probably go for their lesser peers. The clock is starting to tick hard on these extreme valuations (hello WeWork, Uber, Lyft).

Re: Algolia raises $110M for its search-as-a-service

#39

Post by aphroz »

mlthoughts2018 wrote: post #37
hnaccy wrote: post #24

Earlier quoted context omitted.

>To even know if you’re buying a decent solution from Algolia or not, you’d already have to hire pretty much all the same staff you’d have to hire to more cost-effectively build it in-house. You just have to pay Algolia, wire up the APIs, and then see if whatever stakeholder that was complaining about search stops complaining. If they do then it's good enough.

Totally false. This is like massively overfitting a high-order polynomial regression to your data. The fit looks good enough, then the next data point comes in and breaks in a way the existing model cannot be hacked to account for. The search results you believed were implicitly tuned to some feedback mechanism slowly experience creep as the customer cohort changes and data distribution changes until before you knew…

Not all decisions are good decisions, it depends on who makes the call. In most cases, someone ask you to use a solution because it looks/feels better. In this case Algolia showed how fast and how well it could be implemented. Once the person who takes the decision is convinced it will be implemented. It's mostly marketing. Probably less than 1% of all e-commerce websites measures the impact of a decision.

Re: Algolia raises $110M for its search-as-a-service

#40

Post by unityByFreedom »

sniperjzp wrote: post #22
faceshapeapp wrote: post #2

Congrats to the team! Although, am I the only one who finds that searching HN through Google gives better results than searching it through the Algolia powered HN search? For example, search "ml" in both, Algolia results are years old and don't seem that relevant, whereas Google picks up more recent threads.

It feels ironic, I searched "Algolia" from both, today's news is ranked as #7 in Algolia powered HN. From Algolia: https://imgur.com/a/atRMnwj From Google: https://imgur.com/a/d3EKdUp Some people says it's popularity based, but if I change it to date based, it's broken? https://imgur.com/a/HGzL6fO

Sort by date works fine. Your last search has a typo `agolia`.
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