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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

#51

Post by wp381640 »

apalmer wrote: post #19
mlthoughts2018 wrote: post #12

I’ve always had a hard time understanding the value proposition in the same way I don’t understand the value proposition of e.g. AWS Rekognition. Paying per use certainly doesn’t make sense, because it has to be qualified by the accuracy you get per use. And there’s no serious way to understand the accuracy you get per use (on your specific unusual distribution of queries) without employing the expensive ML / stats e…

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…

In my consulting I switched from rolling out ElasticSearch on Azure, AWS or on-prem to Algolia and couldn't be happier. I want to scope and build products and not be a sysadmin - clients don't want to do any of it, let alone hiring fulltime sysadmins.

I have one client in particular that is a stark indicator of this trend - 50+ year old company and their second floor where they used to have 30+ developers and sysadmins and a server room downstairs has now been remodelled into a break room and new offices for their new team of 5 (all awesome replacing a ton of mediocre people who didn't get much done for a decade)

They're doing better, their products are more popular, they don't have to worry about recruiting developers + sysadmins, their current IT staff get paid better and they're saving money.

I find Algolia interesting in that they've managed to capture something that Elasitc didn't - and it could be because of a prevailing wisdom similar to that of grandfather's comment

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

#52

Post by majormajor »

mlthoughts2018 wrote: post #12

I’ve always had a hard time understanding the value proposition in the same way I don’t understand the value proposition of e.g. AWS Rekognition. Paying per use certainly doesn’t make sense, because it has to be qualified by the accuracy you get per use. And there’s no serious way to understand the accuracy you get per use (on your specific unusual distribution of queries) without employing the expensive ML / stats e…

> And there’s no serious way to understand the accuracy you get per use (on your specific unusual distribution of queries) without employing the expensive ML / stats engineers you probably thought you could avoid hiring by outsourcing to Algolia / Rekognition in the first place.

You may simply not be able to do this at all. You might not know how to tell good ML/Stats people from bad. You might not be able to pay them competitively.

You might simply want something that's better than nothing, with "nothing" being your realistic alternative. "Expert in-house ML team" is not an alternative many companies can get, and even for the ones that could, it'll take a while. What are you going to do in the meantime?

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

#53

Post by tomnipotent »

mlthoughts2018 wrote: post #35
tomnipotent wrote: post #31

Earlier quoted context omitted.

> 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 inapplic…

> You’re not even addressing the engineering costs though

This is a pretty silly thing to say. How could you possibly know what I'm addressing?

I actually have experience with all of these scenarios, and bar none Algolia has been the fastest, smoothest, bug-free-and-feature-rich-for-the-dollar rollouts for search experiences I have ever come across.

> including asymmetric costs for surfacing bad items in many use cases

Sure, if you're Google, Netflix or Amazon. For the 99.9% of the rest of the world where search isn't core to the business, there's unlikely to be any discernible impact going one way or the other, except saving money and launching faster.

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

#54

Post by sjg007 »

rajacombinator wrote: post #27

Congrats to them but I find the product to perform quite poorly on HN. Seems to do some kind of fuzzy matching / weird relevance ranking and not full indexing when all I really want is a full index text search.

HN search should be parameterized by the user, where they've commented and what they've clicked on. The last part is why outsourced search performs poorly. They can measure what you click on in their search results but I doubt they know what you clicked on HN.

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

#55

Post by briandear »

adventured wrote: post #38

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…

Algolia is also a great project that is easy to implement. I have been a paying customer for years. I have used open source Elastic as well, but it takes a lot more work to run and maintain. I don’t want to spend my time dealing with search, I just want it to work with minimal work. The JS client for Algolia makes it trivial to use — not much work “integrating” it as I have experience with ES.

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

#56

Post by briandear »

apalmer wrote: post #19
mlthoughts2018 wrote: post #12

I’ve always had a hard time understanding the value proposition in the same way I don’t understand the value proposition of e.g. AWS Rekognition. Paying per use certainly doesn’t make sense, because it has to be qualified by the accuracy you get per use. And there’s no serious way to understand the accuracy you get per use (on your specific unusual distribution of queries) without employing the expensive ML / stats e…

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…

> Fundamentally, there is value to most businesses in being able to just buy a decent solution to a non core competency.

Bingo. Exactly that. My core competency isn’t (nor do I want it to be,) implementing and maintaining a search system. Same reason I use Twillio, SendGrid, and Heroku.

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

#57

Post by briandear »

wtvanhest wrote: post #29
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.

This is correct. Lets say you have an ecom site with product search. How do you know if the search is good? You search for stuff and compare to what you expect. Even if it sucks, as long as their is revenue lift, you will keep it until the next solution comes along.

And Algolia has great analytics, so you can actually mesure business value from actual search queries: you can tie a query to a purchase and then run further analysis on that. It’s powerful and doesn’t require any exceptional engineering talent to use.

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

#58

Post by Mister_Snuggles »

mlthoughts2018 wrote: post #12

I’ve always had a hard time understanding the value proposition in the same way I don’t understand the value proposition of e.g. AWS Rekognition. Paying per use certainly doesn’t make sense, because it has to be qualified by the accuracy you get per use. And there’s no serious way to understand the accuracy you get per use (on your specific unusual distribution of queries) without employing the expensive ML / stats e…

> I’ve always had a hard time understanding the value proposition in the same way I don’t understand the value proposition of e.g. AWS Rekognition.

I signed up for AWS specifically to use Rekognition. I use it to screen alerts from my security cameras. In short, Blue Iris detects motion, a Node-RED flow grabs an image and uses Rekognition to see what's in it, if there's a person detected the Node-RED flow notifies me via PushOver. This significantly reduces the false-positives that inevitably happen on windy days - I've already done a lot of work in Blue Iris on this, but passing alerts through Rekognition makes it almost perfect. Based on my testing, this reduces false-positives to zero and hasn't yet produced a false-negative.

Based on my usage I expect my costs to be ~$5/mo once I'm no longer in the free tier. This is cheaper than the person detection service that Blue Iris natively integrates with and is significantly less effort to get up and running compared to, for example, TensorFlow. I also assume that Amazon will periodically update their detection models to make it better, which is one less thing for me to worry about.

For me, all of these benefits are worth the ~$5/mo.

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

#59

Post by [deleted] »

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…

[deleted]

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

#60

Post by goertzen »

Congrats to the whole Algolia team.

I can’t think of any SaaS business that invested in, and executed such a smooth onboarding and retention ecosystem.

I’ve used them for small sites and large enterprise clients (10B+) and I’ve always felt like I’ve got way more than I’ve paid for.

PSA: Algolia has basically hidden a category making/taking over strategy in plain sight.

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