Afaik [1], there's about 5 employees and the revenue only covers server expenses while they're still trying to get more headcount. Not an expert on bootstrapping but I'm pretty sure you don't want to expand faster than your revenue does otherwise you stop being able to make all the decisions for the company.
SAFEs are often capped, so taking awhile doesn't matter so much, except maybe interest calcs
Need more money? Economic model not quite working? Companies face this all the time. Some solve it innovatively, survive, and show everyone else the way forward. Others fold or pivot.
But ad revenue short-circuits the hard process of economic innovation by tempting tech companies to take an easy way out, even when the problem is solvable without it.
(All of this wouldn't really be a problem if the ads business model weren't inherently adversarial against users.)
I agree that on the whole, people will continue to go for the free option, but I'm just glad that some options are appearing to pay, which rebalances the incentives a bit.
Yeah, I should use a hacked rooted Android yadda yadda. But I just spent a week hacking and hawking for my life in an ICU, and I certainly didn’t want sanity-saving podcasts to shut down whilst on an hour-long stay at the breathing machine. Life is short.
I think another factor is the paradox that the user who has enough money to be willing to pay to not see another ad is exactly the most valuable user to advertisers— they've pre-qualified themselves on multiple axes.
So there is always going to be an enormous moral hazard here with the ad-driven-freemium model— always a temptation to run an occasional high-value ad to the paying users, or to disguise the ad as a "recommendation" or position it instead as a "sponsorship", or whatever else. Other than users reacting swiftly and decisively against this kind of thing, it's hard to know how else to keep companies away from it.
Of course this depends on how the supply demand curve looks like for their specific business.
An angry bird informed me about this :)
Though in this case, it's likely that Twitter has repeatedly run internal studies about what a paid-tier would look like, and each time concluded exactly what the GP is passing on: that it would be a net loss because the most-valuable-to-advertiser accounts would be the first ones to pay.
Even just psychologically, it would be a major blow to their sales pitch, going from "pay $X to put your name in front of the top movers and shakers in the world" to "pay $Y to put your name in front of all the Twitter users too cheap to cough up $8/mo to not have to see you." Not hard to see that $Y is going to be less than $X... probably a lot less.
The reason they advertise is because they can. It doesn't matter how much money they're making now, they can always make more by advertising. Paying money just makes your attention more valuable. The only way to stop them is to make it impossible or illegal to advertise. Blocking ads everywhere and making no exceptions.
* one does not need $200-300B ARR to run a search engine; and merely making a ton of money does not mean that the way that one has been making that money will continue forever
* using Kagi, one realizes how much the web has been perverted, in my opinion, by the obsession with the ad model; there are many nice, novel things that Kagi could introduce which would reduce ad revenue for a company like Google, but would be useful and novel for Kagi without loss in revenue (on the contrary — could help); ie google is incentivized to keep people on the site through various irritating means; a search engine that isn’t distracting and gives me what I want — I would be more than glad to pay for (and already do pay Kagi $10/month)
Other thoughts:
* Supposing $10/month (honestly I would consider $20) with 100M paying users; that is $1B ARR which is not bad at all and is more than plenty for a meaningfully sized team with meaningful salaries.
* Just like how lowered energy prices during and after the Industrial Revolution made manufacturing at scale feasible, the incredible amount of high quality OSS and infrastructure these days is making it increasingly feasible to do things Google did 20 years ago — something unthinkable for even the best engineers of that era. Not to mention the relative ease of collecting capital with payment services (let alone VCs, etc.) today — even with a looming recession factored in.
That would actually be $12B ARR, since that price is per month while ARR is usually per year.
35 dollar is maybe ok… …. Maybe better than spending 3500$ on … I dont know … stuff is good also ..
In a sense, that model is better at distributing income, because everyone gets a service and the people who can afford pay for everything. If everything was behind paywalls, people who can afford would have all the nice services and people who can't, will have nothing.
What's interesting is that "targeted ads" is a bit of a misnomer. It's more of an ads ranking, where the user is shown the ads they are most likely to buy. However, from the point of view of the car dealership, when they think targeted ads, they would like their ads to be shown only to people who will likely buy the car. No company would want their ads shown to someone with no disposable income, yet, they will be shown some ad.
US attention is the most valuable because it is the richest large nation and the largest rich nation.
European attention comes a distant second. Together they have 40% of the global GDP, but likely something like 60-70% of the consumption of non-essential goods in nominal terms. Accordingly, average advertiser cost per clock differs ~10x between the cheapest and most expensive groups of countries.
They have a full business suite, App Store, hardware sales, fiber internet, wireless cell and internet, and a server rental division.
Yep, but the main problem here is the perverse pressure to grow indefinitely.
And that comes from it being acceptable for public companies to pay no dividends and instead rely on share price increases to deliver a return on investment.
Something that slows down this growth spiral would fix things partially. Require profitable companies to pay a % of the profit as dividends to their shareholders?
Now the issues is not just privacy but making sure it does NOT optimize search results based on prior searches or other facts it knows about me.
Now the big problem is that one would think delivering the exact search results that I am looking for is a good thing. No. It is super dangerous. It can causes me to live in a bubble, blinding me of possible opposing opinions. It is feeding my ignorance.
So there is a goal conflict here. I don't know how to solve it. I wish there would be something like Wikipedia for search engines but even the wiki models has its problems and biases.
On the other hand, a lot of the search results bias stems from the search query itself. "Does X cause Y" for example will show results that echo the search, and not show opposite results. Simply because you did not ask the opposite or a more open/unbiased query like "X Y".
This way you get anonimity and custom results
Yes, the server has access to the information the client has, but it doesn't have any way to confirm that's true. It also could avoid storing that information all together if the client sends it again every time
On the point about payments, there are some potential approaches to handling this, but they tend to be a bit complex and technical. I"m not sur ethis is really a technical problem though (or at least one where a technical solution is what's needed).
A challenge of taking traditional payments is that the identity of the payer is inherently "linked" (to some extent) to the transaction. You could maybe use a privacy.com type intermediary or similar.
What you could do however, is buy a "kagi voucher" or similar, which would be an RSA-blind-signed token that you generated client-side in JS. You'd send it to the server during the payment transaction, and be given back a signed version of the token, which you unblind client-side, then give a backup copy to the user to save, and set it as a cookie to authenticate payment has been made.
That should, in theory, at least un-link the payment from the user. Ultimately though, a bad actor can still trivially correlate your searches (and payment, if you used same IP or browser fingerprint), and all your searches are linked by a common cookie.
So you decide to create some kind of token fountain, which you can auth to with a blind-signed token, and get 50 "search passes" from. Those could be unique per-search, and just be "bearer tokens" you can use. You'd have to trust that this token fountain doesn't record which search passes were issued to which "blind token".
Ultimately, it feels like this problem then becomes "do you trust your search engine?" - I'm not sure this is a problem that technology needs to solve, as ultimately your search provider is seeing your queries and IP, and most users won't realistically change this. A provider that isn't incentized to act against your interests (i.e. something like Kagi which isn't advertising to you or selling data) seems to address this for most user scenarios.
We already know that Google is in fact cooperating with these entities. Not only by giving out user data but also by actively censoring certain things. So there is a precedent.
This made internet completely unusable for discovery. A big shiny window into another tiny room. Absolute BS.
Recently I discussed it here on HN and was advised to like, dislike, subscribe and so on on youtube (things I rarely have done on my old account) to break out of this bubble. Well, it doesn’t work. It just suggests the content I immediately dislike or ban entire channels and it all settles to the same echo chamber as before.
Same for google search, really. It turned from “I’ll find you that if it exists” into “Look, if you change your query to ‘cool products if at all barely relevant to …’, I have literally billions of results for that”.
I'm sold, literally.
Cable television and netflix have made it quite clear that payment does not mean “no ads”, it just means “no ads, yet”.
It still might be a better alternative in the short term, but the moment growth starts to peak, companies follow where the incentives lead them.
The agreement could be carefully written by a skilled lawyer to define the things Kagi cannot do, the proof customers must present in order to proceed with a valid lawsuit, and even the maximum damages that the customer may sue for.
In that case, if Kagi was found at some point to be using customer data for these purposes, it could be sued very easily and by many parties.
People are calling for regulation for data privacy. What is regulation but law? Kagi can create its own regulation it will hold itself to for the benefit of its users, can it not?
I think what's more interesting/concerning/insidious is hidden ad content like product placement. It's getting to the point where personalized product placement could be embedded in shows dynamically.
All major content providers left them years ago and started their own Netflixes. So they're left with a few movies from ten years ago, a couple of recent-ish releases, and their own content.
In the streaming space in the US there is: Netflix, Disney+, AppleTV, Amazon Prime Video, HBO/Discovery, Paramount Plus, Peacock, STARZ, and a few other players. There is no “opoly” in streaming video.
They certainly have the ability to uniformly raise prices (tacit collusion) with no viable competition to enter the market and fill the gap (as even the vast sums others have thrown into it have shown how hard it is to produce good original content).
This is probably due to the characteristic that producing goods (decent original content) in this market is a big barrier to entry - which naturally leads to a small number of players. Natural monopolies and oligopolies are common - but do require closer regulatory attention to ensure desirable consumer outcomes than just letting the free market decide.
It may not entirely fit all definitions, but the general economic theory and applications/implications are relevant to consider this market.
The original post that you questioned was related to vertical integration - you could effectively find and replace it to “so you’re saying producers of operating systems shouldn’t be able to make their own web browser?”
The market is “content”. Netflix competes with YouTube content producers, TikTok and it even said that one of its biggest competitors is Fortnite.
> This is probably due to the characteristic that producing goods (decent original content)
This goes back to YouTube. You and I may not think that YouTubers and TikTokkers are producing “decent original content”. But there is a generation that spends hours on both.
Besides that, there were over 550 original series being produced last year (https://collider.com/too-many-tv-shows-550-series-2021/). Competition is much fiercer for your attention than it was when you only had the three major networks producing content and everyone else buying rights to show reruns.
There are bidding wars between all of the streaming services for new content from producers. Competition is more fierce than ever.
The price of streaming before was never sustainable. Netflix was borrowing billions a year for years to produce and obtain content. Disney+ was never going to be profitable selling its service at the introductory price. It’s not “collusion”. Every company has to turn a profit eventually.
Yes I realize that Netflix was “profitable” by GAAP standards. But it was getting deeper in debt every year.
It competes with these for screen time, not for content.
Meanwhile Disney owns how much content (movies, series and related IP)?
And the value of IP without execution capability is overrated. Warner also has iconic content. But Disney has been able to make successful movies out of its 3rd tier IP while Warner has struggled with its first tier.
Sony isn’t doing too well with most of its Marvel content except Spider-Man and that’s produced by Disney.
I think time has shown MS was correct in making their own browser, but of course incorrect in all the corrupt tactics they used to make their browser succeed over Netscape's.
IE was a much better browser. Especially the Mac version that when it was introduced, was the most CSS compliant browser that existed.
Netscape starting over from scratch was cited as “Things you should never do” in an article written by Joel Spolsky (StackOverflow cofounder) two decades ago.
https://www.joelonsoftware.com/2000/04/06/things-you-should-...
So far. I imagine they will be expanding it over time.
With the exception of filler ads for their own content that occurs when they need to wait for the next quarter time, ex movie ended at 12:55pm. There have been no ads
To say nothing of the fact that Hulu has maintained an "ad" and "ad-free" tier for their original programming.
I am paying and have no way to disable that visual pollution nonsense.
Extremely exasperating when you are trying to choose something adequate for toddlers and they keep seeing flashy stuff on the screen and saying they want to watch that.
Take Spotify as another example. I pay them, along with 188 million other people. Does that mean they won't turn around and ask artists, record companies and rights-owning conglomerates for money (or rebates) for putting their stuff in front of me? Of course not. Paying them means they have some interest in pleasing me, but it's far from the only way.
On the off chance that Spotify was being scrupulous about not taking payola in any form, it would be impossible for me to verify. Which is in itself a reason for them to cheat; they don't get much economic benefit from goodwill if no one can actually see them being honest.
This is not a reason to not use Kagi, it's just a reminder of what forces we're up against. Kagi will need an unusual amount of transparency in everything they do, in order to stand a chance in the long term.
And it IS a reason to not get warm fuzzy feelings merely from the fact that you're paying them.
However, for sure that will get out eventually.
If that happens, I would then look at other search engines as well.
Most people wouldn't once they get used to doing it one way, so that's all to the good for Kagi. But people like me wouldn't then use it, which is what life is about - your own personal choices.
I prefer to pay for services because at least there is a slight chance that they will follow their business plan.
But nothing stays the same for forever. As a consumer, we must also change to the changing environment. I'm completely weened off Google, for quite a while now, for example. I'm paying for everything that I use. But it is so little as to be laughable. For example, I use tutanota for my email, first account is free and subsequent ones are $1/month. Big whoop. $12 per year for private emails. I have a number of emails through them because I segregate all my emails - one for just friends, one for business, one for education, etc.
2. Create a new plan at the price of the old plan. With ads.
I'm sorry, but pretending that they're not adding ads to their "regular" pricing plan is semantic at best. This isn't something they dreamed up overnight. They've been planning this for years and increasing their prices accordingly.
for now....
No VC startup would do that but if possible would allow trust.
Complaining that cable TV isn’t ad free because you pay for it is like saying all content over the internet isn’t Ad free because you pay for your internet connection.
'It's better to be a millionaire hero than a billionaire asshole' (Ben Elton, Gridlock)
Of course at $10/month even a 1% share of the search engine market would make the company worth billions.
If that is the only metric, the best business model is to extract as much money out of your user, while simultaneously offering less for the same amount of money, until you reach the asymptotic ideal of 100% profit.
If you were to start a company, would you be willing to do that? Would you choose profit over everything else? Some would, but not everybody.
Companies have an incentive to make money off of their customers' data, and technology just means that they can make money at every level (your ISP, your smart TV, the apps you use on it and the websites your browse).
We're so accustomed to entities gathering data about us that it's become part of the background.
Why is it the default that my home is on Google Maps/Google Earth? I should have to opt in, not opt out.
Just because there is "public" information about me as a registered voter or home owner doesn't mean that anyone should be able get a copy of this data, put it online and connect it to other data?
[0]: https://teclis.com/
Google search only shows paid SaaS platforms in the first page of results.
----
I have an idea (more here[1]) that the next addition to our civilization should be a distributed system to evaluate, reward and compensate externalities. Open source software is a great example. It's free, it has massive benefits to users and for people reusing it for all sorts of projects, it's public. Yet we still can't find a great way to fund it. There are donations, and maybe that's all we need in some sufficiently enlightened society, but I think we should be addressing those more directly. And clearly there are technologies which generate friction and other social costs, that could be (differentially) quantified and prices. The same goes for pollution and a miriad of issues.
Laws can help here, but laws tend to lack softness and specificity in my opinion, and laws are strictly punitive. If you're generating a negative externality, and the legal system is well designed, maybe you'll have to compensante for it. But that relies on quick lawmaking and judges evaluating something they're not specialists at. And there's no dual for punishment (actually compensation and reeducation), there's no intrinsic reward system. There are prizes and grants, and I'm sure they generate immense value for what they are, but they're still very unsystematic and unreliable, I think.
I dream of a system where if you generate value for society, you will be recognized and make a comfortable living off it; if you need investment, you will also be supported. (I call this idea Elementalism; I'm not sure it's original)
I think we need to be a little more open to careful, thoughtful changes to our social-economic system that can improve things.
While Elementalism isn't a formal part of our system, each of us can do our part and give directly to what we understand needs the most. This is the core idea of Effective Altruism which I also extend to donating to Open Source (which I believe can be effective[2])
[1] https://news.ycombinator.com/item?id=29043752
[2] https://www.reddit.com/r/EffectiveAltruism/comments/v7ma0d/w...
240 searches cost them over $10.00. They will need to find additional revenue or reduce costs to even reach a break even point.
They will have to raise prices or make you pay per search or sell your data or better yet all three.
If their paying user base grows by 10x, do the searches drop from 4¢ each to 2¢ each?
.0125 per search. The teams rate is twice that.
I'm a user now, and potentially a customer if I hit their free limit.
Is there some zero-knowledge protocol that could help here? In particulat, to establish that a user is currently subscribed, without revealing which subscription they have?
What really excites me is that is that I'm paying them. That sounds odd, but seriously. It's incredibly refreshing to know that the company providing my search results has an incentive to make things better for _me_ and not a legion of advertisers. With Google I can't help thinking about every keypress being logged to optimize sales pitches at me. I just don't feel that with Kagi, because I'm paying them.
Sure, they might be logging every keypress (I don't actually think they are, but you never can tell) but even if they were, I could be reasonably certain they were doing it to retain my subscription, which probably means making my search better, not selling me other stuff.
It's a priveleged position to be in, and the economic argument isn't watertight, but in the "search as a brain extension" space it still _feels_ premium, because it creates trust. And that frees up brain space for other things - like where the hell was that article I was looking for?