The problem as other stated is that a) Reddit doesn't think Apollo moves the needle on users (I disagree but whatever) b) Apollo users wouldn't want the value extraction that management wants to implement.
Yes, $10M is a fantastically low price even if they throw it away in a year.
The corollary to this is a lot of businesses don't care about $1500 a month, or $10k+ a month, or rather they see an appropriate amount of value, or they value not having to switch. It makes more sense for Apollo to focus on this business. And that is especially true if they have a product that is approaching a commodity.
It also seems like it’s atypical to offer $10K. Maybe the whole thing is an atypical situation and we should trust the article vs. our well-honed software engineer intuition?
Love the logic and intent but then I see people why people are asking about these subjects on ProductHunt:
There's two pricing plans "free and all the features" and 4.99/"user"/month if you want to remove their logo.
That makes it read as self-congratulatory - there isn't a plan for it to be a sustainable investment, and it's not clear it's that cheap either.
Either pole of "take $10M in funding for a SaaS" and "eh we'll be free 99% and figure literally everything else, from marketing to support to sales, on on the fly" is an extreme.
To users, the funding one sounds better: at least that maximizes quality, support, and engagement with the company until right-sizing occurs. 0 reason for users to care that it'll feel like "losing" to the founders or that VCs will be disappointed.
I actually thought the 10k price tag was extremely reasonable based on the article write up. Yes it's beyond most personal users - but that is not out of the reach of even a small group of people (be it education, maker spaces, or small business). I would have expected an extra 0 on the price tag.
Also if it's $1000/year (or even better per version) flat and really useful it's actually kinda easy to get green light.
If it's $5/user/month, with 3 plans, with add-ons and it's unclear how many people you have to on board (just devs? Maybe business too? Does security team need access?) it's much harder discussion as nobody knows final cost (apart from the fact that we're not gonna like it in the long run).
I disagree - I don't think $10 / month is insane. Our low price expectations are driven by SaaS companies optimizing for growth, not profitability. Look at some of those "affordable" products out there: Slack, Asana, Shopify, all not profitable. The biggest surprise here, I think, is that VC-driven "growth first" companies have shifted customer expectations to think that everything should either be free or sub-$10 / month. The economic reality, however, looks quite different, if companies would aim for profitability (not many in the HN bubble do).
The enterprise market is paying for this level of service and $150K a year is a drop in the bucket. They are already paying it for Omniture and they pay it for the support that comes with it.
Providing a similar product of sufficient maturity with the same level of support (eg. human support) at a far lower price is not feasible, IMO.
Plus, the free product is already there. It's pretty hard to disrupt something that's already free.
To answer your other question, Urchin was around $500 / month for the hosted version and $5K for the installable version.
They are targeting a niche who is likely more willing to pay for this than average internet user. I only ever see long twitter threads from VCs, developer advocates, CEOs, startup people who spend $$$ on productivity software to optimize their life, etc.
It's fine if it is $100 from 10 customers than $5 from 1000.
To put it in perspective, this is less than what Microsoft paid for PowerSet ($100 million for a search engine), Farecast ($112 million for a airfare pricing comparision tool) or less than what Google paid for FeedBurner ($100 million for a RSS reader).
The satellite plans to do a detailed mapping of the entire lunar surface. If a web startup built an application in the lines of Google Maps using these mappings that would probably sell for more than $78 million, more than the whole cost of the Moon mission. Bit if an exaggeration but you get the point.
Even at $10 a year, it's a very weak statement to make about costs. If you can't afford to pay $90 more a year on something simple for your startup, you have other problems.
There's something else very odd about their pricing. On their lowest plan, the nominal per-user cost is $2. On all the other plans, with the exact same features, just more users, it's $2.50. A price structure that directly incentivizes not upgrading, however slightly, is very backwards.
That's where our nerdy brains go when confronted with pricing plans, but I'm not sure that the person actually buying this would see it the same way. Imagine that you're a business and you're paying for tools so your employees can actually get work done and make money. Do you really think that when you hire employee #6 (probably for an all-in cost of six figures), you're going to be scrutinizing the bump from $10 / month to $25 / month and trying to figure out what your per-employee cost is? Umm...no. You're going to hit upgrade and move onto something more productive. Or you're not going to be employing anyone for long.
I think they need to revamp their marketing speak and triple their pricing.
The price starts to go up steeply once you hit the % of monthly spend.
I'd guess they don't get many resource intensive support queries from the < $10k a month customers (and at that level you probably don't get the A team support)
The next tier is 25 users for $2500. So it went from $1 per user to $100 per user.
JIRA is, by its nature, a multi-user software. The $10 for 10 users is clearly engineered to get small teams to commit to using it and then squeeze them when they grow.
That is a reasonable strategy for what is a product for companies i.e. enterprise software.
It wouldn't work for a product that is primarily for people who are paying from their own pocket, like, I assume, everyone here that expressed the want for a self-hosted version.
It's been my opinion for a while that the $150/mo seat fee, from not all of their users, isn't covering their burn rate, and that they are loosing market share in money marking projects to Unreal. Ideally they would like proper percentages, but since they lack a compelling advantage, they must price lower relative to Unreal. Feel free to prove me wrong with actual numbers (but: 1800 employees in SF ...) @ av, 200k/employee, I make that 360m/yr just on salary :) So, anyhow, I completely agree with this post. And, looking for cashflow and better rendering tech, they buy Weta .... maybe they will pull this off .. but maybe not, also.
The problem isn't the amount of money either. It's that their product is bad.
I havent tried the recent Quest Pro but based on reviews I assume it's pretty good. Not great, not sexy, but pretty good. Their flagship application however, Horizons, embarrasses meta every time a screenshot gets shared. It is so dorky and uninspired that nobody wants to admit they even tried it.
Who exactly are they targeting with that thing? Adults? Children? Their messaging and pricepoint around the Pro seems to suggest they're expecting office workers to use it for virtual conferencing. Who are they kidding with that?
The cost is part of the forward-looking vision. That part makes sense to me. It's the product that baffles me. It just stinks.
Yes, $10M is a fantastically low price even if they throw it away in a year.
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