Yev here -> we HAVE to be cash-flow positive since we're not VC-funded. When we started the company it was bootstrapped, so "making enough money to survive" has always been a part of the equation!
Yev here -> Interesting takeaways! It was difficult to map how many customers we'd gain after Crashplan left the business and how many we'd have gained if we had raised prices by a lot more. It was made more complicated by the fact that they partnered with our 2nd largest competitor, so we also had to do a quick "sanity-check" about whether or not we wanted to raise prices to near their level, or stay the same until things calmed down. Thanks for the insights!
Yev here -> Interestingly, they aren't decreasing as quickly as they once were and that was part of the impetus for the increase. I touch on it in the article and we go further in detail in the original announcement, but it used to be that the data growth of the customer was more or less negated by drive capacity increasing and cost per gigabyte going down - but that trend has stymied recently.
Yev here -> yea, someone needs to send Patio11 this article, maybe I'll do it. I'd love to hear his take-aways. It's tricky, some of the folks internally were like "Oh man, response was so positive, we should have raised it by a lot more" and that's a tricky takeaway to refute - but it's important to remember (at least for me) that any deviation could have had dramatically different results, and because we've already done it - we can't test a first-time increase anymore!
Yev here -> Maybe! That was one avenue we were considering - do the announcement, then make the increase only effective for new users instead of existing. I think one of the reasons we shied away from that was it would create different user "classes" and we'd need to keep that tracked somewhere, so it would still have been some engineering effort to make sure that all the billing code worked correctly. Eventually we decided on the extension program because it also moved up some revenue, even though it was deferred.
Yev here -> Interesting! This price increase was for our computer backup service, not B2 Cloud Storage which does compete with S3. To my knowledge most cloud storage doesn't get more expensive as time goes on. We've had one competitor in the cloud storage space who did raise prices, but typically that trends down (we've decreased our download fees for B2).
Interesting to think about that perception though, I didn't consider that aspect of it!
Thank you so much! We love sharing and hope it gets others to be more comfortable doing it as well (to our knowledge no one in SaaS really talks about churn rates if they can help it). The idea being, the more folks that talk about things the better. If you can avoid making a mistake someone else made because you read their story about it from their perspective, that's good for everyone!
Yev from Backblaze here -> Jack that's interesting insight, thanks! What's funny is that I was the main driver internally for tone and the process as a whole. We definitely had some intense conversations about the "band-aid" approach where we'd announce and raise shortly thereafter, and the approach we took which was a bit more measured. In the end, I think we spent a lot of time making sure that we were taking care of the customers, but you're right, our tone in certain communications did come off as a bit apologetic.
The truth is we'd never done it before, so we weren't really sure what the reaction would have been - so we erred on the side of caution. Now that we have data points, if we ever need to do this again we'd likely still take an open, honest, but maybe more blunt approach. Tough to say though because I try to default to default to empathy, which means my takes are usually softer. Those conversations are some that didn't quite make it to the blog post, but finding the right balance for us was an interesting process!
Yev from Backblaze here -> thank you Jay! Our customers were one of the reasons that we felt it would be interesting to share our process, so they could read about how we shot ourselves in the foot :D plus the story is so odd that it was just plain interesting!
Yev here -> in purely academic terms maybe, but there are a lot of factors which go in to whether or not a person will leave or stick around. I thought it'd be interesting to write about our journey (since it was super atypical) and provide some insights into how we make decisions.
Yea they went through a bit of a rough patch, but it's honestly been years since that was the case, they're more in-line with other manufacturers now and the pricing is very competitive!
Yev from Backblaze here -> If you have a lot of data (over 4TB) I'd recommend a local NAS or a simple Drobo to hold the data locally in addition to Backblaze for the computer. If you get a NAS we're integrated with a few NAS vendors with B2 cloud Storage so you can also have those NAS systems directly moving data to B2 as well (separate cost structure - but good stuff).
Yev here -> Hah! It's less expensive and as long as failure rates are below a threshold for us - we will usually skew less expensive. Now, if failures start creeping up there's a lot more math involved, but since we're built for failure, we are very calm when a drive fails.
In some environments when a drive goes down, everyone goes into "red alert" mode and they have to rush to repair the drive or replace it. In our case we don't have to drop everything and run to it - so it helps keep the overall replacement costs down.
Yev here -> Yea, the HGST drives continue to do really well for us, but at around 2% the Seagates are no slouches - especially when you consider the sample size. That's a pretty darn good ROI from drives that also tend to be a bit less expensive!
Huh! Would you look at that. We had some of our Operations Team go to the Netherlands a few months ago, but they swore they just wanted to see the Rijksmuseum...
Yev from Backblaze here -> Still working on it ;-)
You know, as a funny aside - it turns out that it's hard to open a data center in a different country. We're learning quite a bit about the process! Very fascinating stuff, will make for interesting blog posts :D
Yev here -> we're taking a look at the sessions and possibly implementing a "hey are you still here"-type thing that a lot of banking institutions use. The thought being, if you've logged into your Backblaze account and left the computer open and unmonitored folks have access to your data (granted they also have access to your computer - but you can log in to Backblaze from any device to do restores - so we went with short-ish sessions).