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Tell HN: Sendgrid increases price by almost 50%, weeks after acquisition

30 points by siquick ↗ HN
Just received this email.

"As a valued SendGrid customer, we would like to inform you of an upcoming price change to SendGrid’s Essentials plans, effective January 1st, 2019. This change reflects ongoing investment in our infrastructure, products, and services, ensuring that we continue to provide you with a best-in-class experience.

Your Essentials 40K plan price will change from $9.95 per month to $14.95 per month. Please note, this pricing will be in effect for new customers on December 1st, 2018, but as an existing customer, we’re providing you with additional notice in case you have any questions. Your January bill will reflect these changes."

23 comments

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AznHisoka
"valued SendGrid customer"
anitil
50% more valued by the looks of it
rfc
We signed up with them 2 months ago. As a small but rapidly growing company, we have to keep a close eye on our costs. We'll be cancelling our service with them today because of the price hike.
ezekg
You'll be canceling over a $5 price increase? Seems a little excessive. Paying $15/mo isn't unreasonable, imo, for sending up to 100,000 emails. Mailgun charges $79/mo for the same, if I'm not mistaken.
rfc
Seems excessive on the surface but over the course of a year, that's $60. Still pedantic? Sure, but $60 in adspend for us generates $1200 in revenue. As a bootstrapped company, every dime matters to us.

Why sacrifice that when there are alternative options for cheaper, especially when we're only sending out a handful of emails/mo?

wedowhatwedo
How much time will it take to find an alternative? If it takes an hour, you've spent way more than $60.
rfc
We switched from Mailchimp to Sendgrid; not hard to switch back. We were hoping to get to a more robust tool but can make do with the basics for now.

Also, I wouldn't value my time at $60/hr right now. When you're barely paying yourself in order to grow, hard to think of it that way ;)

pedalpete
We also switched from MailChimp to SendGrid, but it appears MailChimp will still be more expensive as they bill based on the number of "subscribers" instead of number of emails sent.

On MailChimp our cost is $210/month on SendGrid it is $100.

However, looking at their updated pricing, they also now have "Marketing" as a separate pricing tier, so I can't say exactly how that will affect us.

Keen to hear suggestions of who else to use.

tomlor
If every dollar in adspend nets you 20x in revenue, why are you quibbling about 5 bucks a month and not pouring money into advertising?
yroc92
I’d like to know as well. If you’re getting 20x ad spend, you’ve hit the jackpot.
rfc
Couple things:

1) We're services/project oriented. So for each $1 we spend, we receive ~$20 back on revenue. That unfortunately doesn't compound and isn't recurring in the normal SaaS sense.

2) That's $20:$1 on revenue but not profit. We average between 15-25% net profit. Not great and we're trying to focus heavily on increasing this but it's quite tricky. Incrasing this usually means very expensive equipment purchases for automation.

3) I wish we could pour more money into advertising but we have to save up for additional equipment to purchase to expand services or pay for future software projects that could help us generate recurring revenue. We don't have deep pockets to leverage since it's bootstrapped. Otherwise, we'd have gone in guns blazing on advertising!

soneca
If every $1 becomes $3 ~ $4 in profit, makes no sense at all to "save" for equipment.

The progression with only investing in ads, each cycle multiply by tree your profit:

$1 -> $3 -> $9 -> $27 -> $81 -> $243 -> $729 -> $2187

The progression with "saving" the money

$1 -> $2 -> $3 -> $4 -> $5 -> $6 -> $7 -> $8

kohanz
I think they're saying that they are unable to meet the demand (lack of either equipment or people) for the new business those extra advertising dollars would bring in. So they can't just continually pour $ into that pump.

Although I agree it's unusual to see that metric used (revenue per ad-spend) for a product that seemingly can't be scaled very much.

quickthrower2
They probably could benefit from some finance. Or at least factoring.
coralreef
Could be because they lose money on every sale, but will hopefully make up for it with volume.
kull
You should probably consider increasing your prices
gesman
This is very competitive space. Hiking the price will make competitors happy and customers not.
bdcravens
Probably why Twilio isn't interested in making their money at the bottom. (Can't tell if they are increasing price at Pro tier - I haven't seen any such email however)
cm2012
If you save a half hour of developer time per year by not switching, you come out ahead.