> 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.
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?