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0 pointsjsnell2y ago0 comments

The expensive parts of the infrastructure are not their own, and the expense will scale by number of requests.

Back of the envelope:

The Bing API costs about $0.015 per query at the most cost effective tier. Kagi's highest revenue per query pricing is $5/300 queries = $0.166 / query. That's pretty slim margins, and only made worse by the $10 tier.

Now, they can of course start doing exclusively their own crawling, indexing and ranking and avoid paying some larger search engine for API access. But for that to be cheaper, they need orders of magnitude more scale

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diggan2y ago

Kagi has a bunch of different sources, it doesn't seem like all results come from the same source, so without any particular insight into how each query works behind the scenes, I'd gather it be very hard for any of us to come up with an average cost per query like you tried to do.

https://help.kagi.com/kagi/search-details/search-sources.htm...

jsnellOP2y ago

Sure, that's why I explicitly stated it was a back of the envelope calculation. It wont be right to the penny, but it will certainly have the right order of magnitude.

I'll assert that even a back of the envelope calculation is more useful than your initial "they must be sustainable unless the infra is inefficient, and it feels like it isn't" statement. Do you have an actual number rather than feelings? Is that number significantly lower than this estimate?

freediver2y ago

Vlad from Kagi here. We are very close to breakeven currently, with 4+ years runway with current spend and it gets better every day. Budget for shirts was allocated months ago.

Kagi is slightly different than other SV startups in how we approach things because of the freedom given by being (nearly) completely bootstrapped and built with sustainability in mind since day one. Some companies buy ads to attract new customers, we buy tshirts to show gratitude to existing. We also reinvest any savings we make into lowering the price and increasing the value of the product (check our product velocity in release notes [1]). Our customers propelled us to where we are through word of mouth, it makes sense to keep investing in nurturing that relationship. And having 20,000 doggos walk around the earth soon is fun.

Winning in search is a marathon, not a sprint. We might as well enjoy the run.

[1] https://kagi.com/changelog

justinclift2y ago

> We are very close to breakeven currently ...

Cool. Didn't realise that.

That's really good news as it proves the "search engine people pay for" concept is workable, unlike what many people seemed to think. :)

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