They went from "a few tiers + pay-per-use above that" to "one low tier + flat rate unlimited" not long ago, don't you think they a) thought it through and b) are flexible enough with their pricing and profitability?
> the $10 per month unmetered search plan was not financially sustainable for us.
This was in March; fast forward a few months and surprise, they offer a $10 per month unmetered search plan. With unmetered LLM usage to boot?
I think it is obvious from their own math that the only way flat rate would be profitable is if they go for growth-based approach, burn whosever investment money for a bit and accumulate enough light users that they end up fully subsidizing the power users. I.e., they are hoping that the tragedy of the commons will not apply to them. Good luck to them, I guess.
(That, or they have the infrastructure to enforce some limits on unlimited plans. Unlikely, as it is not mentioned on the pricing page. If true, this would mean some invisible and inflexible limits I would have to be constantly mindful of running against—which is significantly worse compared to pay as you go.)
What changed is:
- Price of LLM APIs dropped significantly faster than we anticipated
- Kagi started getting adopted more broadly, which in turn meant more people who do not search as much started using it, lowering our average cost per user
Combination of those two factors made us more comfortable to adapt pricing again and pass all anticipated savings to our members.
Kagi at first seemed strategic with metered paid search, but choosing to go for growth and hoping most users will not search a lot feels like a downgrade from that.
We all know the hype cycle of programming languages. Hype, disillusion then plateau of productivity. It's not the same with startups: there is only hype, peak, followed a long descent to the mean and death.
The hipsters were right.
It’s the same reason I choose not to make use of insane promotions that ride app space newcomers tend to provide. I could use Bolt DeLuxe (or whatever is the new hotness in town) for a couple months, but the anticipation of how I will soon suffer as it becomes more and more of a ripoff with incompetent drivers and absent customer support, and how I’ll waste willpower on changing my habit again, makes me wonder if it’s really worth it. Instead I could in meantime exercise my taxi hailing skills (in this analogy, practice crafting queries and otherwise working around the limitations of worse search engines).
They've repeatedly adjusted their pricing and usage rate billing based on their needs so that I don't feel there's a real risk from abusers/exploiters. They seem to be pragmatic enough to clamp down on that kind of thing as soon as they see how the costs develop under current circumstances and caused by what users/user habits.
I have that faith in them because so far they've been very transparent in their blog posts about when they've made changes and why.
US corporations doing this never offer proper spending limits per timespan (f.e. Amazon and Microsoft offer this but don't offer real limits - their wording explicitly allows them to go infinitely over and you will just be fucked). If they started doing this I would probably unsubscribe tomorrow (I'm currently a paying user), the culture just isn't there for them to get that right.
The best possible, most honest and sustainable option would be usage-based billing, but it appears that Kagi have decided against that route.
I’m a moderately happy customer and would hands down recommend Kagi, but personally wouldn’t use it by default as the inevitable cost of changing my habit again in future puts me off.