[freediver]

> but I think it's a bit weird to have a pricing tier than effectively doesn't work for anyone who would pay for the service.

When we had only the $10 plan, we were getting messages from users that that plan is too pricey for them when they don't search as much.

Hence the $5 month and now about 5% of our users are on this plan. (and Kagi still has zero marketing spend). You have to start somewhere. This gives us an opportunity to onboard almost everyone to Kagi.

> if unused searches rolled over month to month. This tends to feel fairer in general.

Yes, except something still has to pay for all the free trial searches and our salaries. Selling product at cost or below is something VC funded startups can do, which we are not.

[unshavedyak]

> Yes, except something still has to pay for all the free trial searches and our salaries. Selling product at cost or below is something VC funded startups can do, which we are not.

Sidenote, i'd really enjoy the rollover. At least to some degree. Not infinitely of course, but being able to mitigate the cost of some overages would be really nice.

Aside from that i'm a new customer (1st month), having gone through the trial and now on the $5/m plan. I'm quite happy. I expect i'll upgrade to the $10/m, but i hope i don't have to upgrade to the $20/m because i'll be debating if it's worth it. Regardless, a bit of a rollover price would help a ton with any cost aversion. Even if only up to 1 extra month, or w/e, of rollover. Anything would help.

Thanks for Kagi tho, i'm very happy so far! I also really love the continued work and improvements. It feels like i'm not just paying for the current product, but buying into a larger future product. Which also goes to mitigate cost aversion.

[danpalmer]

I don't know your unit economics (but they sound fascinating), but generally free trials are considered a marketing expense and would be worked into the CAC (customer acquisition cost). Then you can trade-off CAC with lifetime value (LTV) and a target payback period – i.e. the break-even period.

Let's say a search costs 1c, the free plan therefore costs $1. With a 5% 30d conversion rate that's a $20 CAC. On $10/m for 700 searches, that's just under 7 months to pay back which is quite long, but drops to just over 3 months if users average ~400 searches, so I can see why you don't want to roll over.

That said, if you believe you have a big LTV/long retention, retained users past their payback period should be more than enough to pay salaries/R&D/etc, so maybe there is more flexibility.

> Selling product at cost or below is something VC funded startups can do, which we are not.

I know it often feels like this, but I think the answer is more complicated. It's often hard to know what cost actually is – when you're hiring, growing, and selling a service running on tech that is hard to price.

I'm interested in how you know your cost per search at such a level of precision. It suggests to me that either you've done _way more_ work measuring it and optimising your infrastructure than I expect for a company of Kagi's age, or that it's a fairly naive number (understandably so!) based on dividing infra cost by number of searches. If it's the latter, are there economies of scale that significantly change the number if you have, say, 10x or 100x the user base?

[freediver]

The answer to the questions is long, nuanced and interactive. I'd be open to explaining it in a more interactive environment, for example our Discord server. kagi.com/discord - feel free to ping me there @VladP