Digital Tech Trek Digest [#Issue 2024.09]

As an entrepreneur, pricing is an important consideration in any evaluation, development, and customer testing. In How To Price A SaaS Product, we see different pricing strategies, cost-based pricing, competitor-based pricing, penetration pricing, value-based pricing, freemium pricing. None of these match what I am ultimately considering: consumption-based pricing. Pricing is critical to define the value proposition statement and determine the range of the total lifetime value (TLV). It can vary greatly for B2C, B2B, and B2B enterprise offerings. If we look at YCombinator https://www.ycombinator.com/library/6h-startup-pricing-101 a basic principle is determining the gap between price and cost. That is your margin and your incentive to sell, and you work with either cost-plus or value-based pricing. Starting with founder-led sales is difficult as you do not have the luxury of a dedicated and experienced head of sales to work on different models and guide a technical founder, even before you enter the minefield of enterprise sales with applicable bids, contract, and compliance complexities. I am drawn back to “Consumption-based pricing is a pricing model that charges customers based on their product or service usage. Consumption-based pricing calculates pricing based on usage volume rather than the number of users and is a popular pricing model for IT services, SaaS, and cloud computing and storage” Cite: Consumption-Based Pricing.

Moving a Billion Postgres Rows on a $100 Budget

I wrote recently about the 1 Billion Row Challenge (1BR). This week, I found this article on the same number with a different title. The objective was not performance; it was cost. PeerDB enables the efficient extraction of data from PostgreSQL into a data warehouse, such as Big Query, ClickHouse or Snowflake. It was interesting to see Arvo as a format used over, for example, Parquet. The product also offers different streaming modes, including log-based (CDC), cursor-based (timestamp or integer), and XMIN-based. I will need to do further research on this new term XMIN-Based.

Test queries against your production database (responsibly)

This post links off to a YouTube video of The Safest Way to Test Postgres Destructive Queries, which provides a basic introduction to branching of the Neon PostgreSQL DBaaS. While the title originally interested me, the example showing the mechanics is like many other product examples in which it is extremely simplistic and not a true representation of “production” size or workload. I see this as a similar concept to AWS RDS Aurora cloning. However, any example should modify the structure of a table, measure the impact of that structure against production queries (note plural), and provide additional metadata rather than just a response time. These are important considerations in my own evaluation of test coverage of data access and the gathering of configuration, data, and infrastructure when running experiments to determine a more optimal data access path or a new functionality requirement. More documentation can be found here on Neon Branching

About “Digital Tech Trek Digest”

Most days, I take some time early in the morning to scan my inbox newsletters, the news, LinkedIn, or other sources to read something new about professional and personal topics of interest. I turn what I read into actionable notes in a short, committed time window, summarizing what I learned, what I should learn and use, or what is of random interest.

Some of my regular sources include TLDR, Forbes Daily, ThoughWorks Podcasts, Daily Dose of Data Science and BoringCashCow. Also Scientific American Technology, Fareed’s Global Briefing, Software Design: Tidy First? by Kent Beck, Last Week in AWS, Micro Newsletter to name a few.

Random Wisdom

This week, I was reminded via a very interesting statement that work-life balance and joy in what you do are critically important. You will not find on a tombstone the statement:

“I never worked enough hours.”

Why are we standing still?

I wrote an email a week ago to several close friends titled, “[w]hy are we standing still?” I opened with “[y]ou are all good friends and you are all smart people. We need to work together more … I deal with startups all the time and I rarely find a team of smart articulated people, so why can’t we just do this?”

What was the motivation? I had just read online that startup A has 100 million users and startup B had just raised $42 million. I came to the realization that I am wasting my time trying to develop significantly better tools in my chosen profession because I would never achieve these types of numbers. Those tools would never need the performance and scalability expertise for which I am widely recognized. I am, as CNN Money recently wrote in “Tech companies desperate for ‘rockstarninja’ engineers,” a “Rockstar Ninja” in the tech field.

I work with startups daily and most abuse the technology being used. Technology is not even the problem. In fact, for me and my group of close tech friends, it is almost trivial at times. What is complex, however, is the people and the process combined with the one thing that nobody can escape, time. Ideas are also not the problem, I have plenty of those. I even have several ideas at various stages of actual implementation including VisMarks – Visual Bookmarking and Mooify – The social barometer for moods, thoughts and emotions. These are each at different levels of initial completion. Are they world changers? Probably not, however, they are iterations of the process of what Eric Ries calls The Lean Startup Machine. (Side Note: The next Lean startup machine weekend event is in New York starting on April 1st.)

So back to my band of smart friends, why are we still standing still? Not being content with just talking, I took action and have organized a 24 hour weekend collaboration at my own home for next weekend, code named JFDI/Bliss (there is an interesting story behind the name). I set aside not one project to tackle but three. And by tackle, I mean create, deploy, iterate and even complete a MVP, keeping in mind the technology is not the hard part. The first project is from my good friend Graham, the founder of Ultra Light Startups. We have had many conversations about our respective ideas in the past years, discussing different potential projects. This project is actually referenced by our second project from another friend, John (uBlanket his current startup), that we discussed just last week over dinner. The third, my own VisMarks project, needs only one technical hurdle solved and some user interface design to complete initial functionality. We will also be reviewing and integrating technology from the Lean Startup Bundle for SXSW for the The Lean Startup Challenge.

I can easily provide the food and drink, internet, power, a large finished basement area, a back yard if the weather is good, bedding (it’s a 24 hr event) and even some of my world class beer collection so there are no physical hurdles or expenses to start working together. That is our lean ultralight startup. We have two goals: first, to be able to collaborate in person because thought can be multiplied exponentially when discussing any idea or problem and second, to have fun.

So it all sounds easy, right? Wrong. What’s missing? Just as the capability of being able to code is only a small portion of being a qualified and competent developer, creating the technology is only one portion of a successful startup. Managing Director of TechStars New York, David Tisch (@davetisch) stated at a recent Ultra Light Startups panel discussion some key points that highlighted the resource components of a successful startup. The ideals of this NYC accelerator are mentorship, network and exposure. We need all three. When asked what is the ideal skill set for a team, his response was three people: one business, one technical and one product person. We need those as well. However, when David was asked what is most important when choosing startups for their program, the answer was the people on the team. Important considerations are how you work together, what have you done together as a team, where do you most need help. For the last question that answer is easy. We need help and mentoring in areas including marketing, business development, legal, accounting, PR, promotion, funding, sales, leadership, management, vision, etc. All of these cost money we do not presently have and are necessary to get the traction of millions of users.

The goal should not just to become rich but be happy, have a lot of fun and make a difference in the world in small way we know best, technology.

There are many innovators in our industry, however, the following are a few I follow very closely. These include Dave McClure (@davemcclure), who I followed for a long time before we first met at the inaugural Rethink Hawaii event in 2009. Dave’s AARRR startup metrics for pirates approach is something I share with many clients that do not see the critical need of tracking what their leads do from initial acquisition. This is necessary to help answer questions including what is the your total cost of acquisition of a paying client and what is the best return on investment.

Eric Ries (@ericries) is a person I have followed now for over a year reading, many great posts including What is a startup?, Four (not five) myths about the Lean Startup and Revisiting the Software Design Manifesto to name a few.

Finally, the Kauffman Foundation (@kauffmanfdn), provides good resources and opportunities including the recent 2011 State of Entrepreneurship Address in Washington DC. Entrepreneurs create new businesses and new businesses are the greatest source of jobs and this creates a better economy. Entrepreneurship is also not just about creating something new, it is also about finding better ways of doing things we presently do. Their work with immigration reform, and involvement with the Startup Visa and Statup America are issues close to my own heart.

I have easily been distracted from my day job and upcoming speaking presentations researching work for our initial kickoff. Excitement is a great motivator to achieving something great.