
Tell HN: Sendgrid increases price by almost 50%, weeks after acquisition - siquick
Just received this email.<p>&quot;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.<p>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.&quot;
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cm2012
If you save a half hour of developer time per year by not switching, you come
out ahead.

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AznHisoka
"valued SendGrid customer"

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anitil
50% more valued by the looks of it

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dzhiurgis
Possibly related? [https://www.fairfieldcurrent.com/2018/11/28/investors-
purcha...](https://www.fairfieldcurrent.com/2018/11/28/investors-purchase-
high-volume-of-sendgrid-put-options-send.html)

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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.

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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.

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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?

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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?

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yroc92
I’d like to know as well. If you’re getting 20x ad spend, you’ve hit the
jackpot.

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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!

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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

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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.

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quickthrower2
They probably could benefit from some finance. Or at least factoring.

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duarteoc
This is not good for customers.

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SamReidHughes
It makes them even more valued!

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gesman
This is very competitive space. Hiking the price will make competitors happy
and customers not.

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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)

