You mean Perplexity Pro? That thing they tried and found that no one was willing to pay for cuz users say they want paid options but then jump boat to the free things always?
"Hundreds of thousands of people" are paying $20/mo for it, according to the CEO.[0] That seems like a very respectable place for such an early product to be.
There's a lot we don't know about Perplexity's costs, like the cost of supporting free users, the difference in usage between free and paying users, and whether these ads fully offset the cost of free users.
From what I've seen, it's typical for startups at this stage to be generating minimal revenue. Perplexity has raised close to $1 billion, so they likely aren't under pressure to be profitable just yet. Bringing in tens of millions in revenue annually would actually be quite a strong start.
It may sometimes seem like “no one pays for anything”, but clearly a lot of people are paying for Perplexity Pro. It’s their business, so they can run ads if they think that will help them grow, but it’s not because no one paid for the Pro tier.
I wonder if cross-examined on that claim, that he would clarify that they have hundreds of thousands of Pro customers. Something like: It’s easy to get lost in the weeds of how much Individual subscribers paid, but that is an accurate characterization of the number of Pro Perplexity subscribers.
The point is, I have a Pro Perplexity subscription for a year, because my ISP was offering year long access for free. I think it is pretty terrible. The answers when I select Claude 3.5 Sonnet as the model for Perplexity always seem incredibly stupid compared to the answers when I use Claude 3.5 Sonnet from Anthropic’s site (which I think is really good).
I like the idea of Perplexity supplying citations, but it seems more like it is parallel construction than citing how the model came up with a particular answer. And, it seems like it is tossing out superior results whenever it cannot pretend to show its work.
> I like the idea of Perplexity supplying citations, but it seems more like it is parallel construction than citing how the model came up with a particular answer.
It's an LLM, throwing whatever text the model says you'll like best. It's amazing that they can hack it to provide links, but if you are expecting it to have a "thought-line" with "traceable research sources", you are just falling for the hype.
OP has a point. Why is this being downvoted? In my neck of the woods (UK and Ireland), everyone I know using Perplexity Pro, got a free annual subscription with Revolut. Like OP, I tried it for a week and moved on.
Its citations are often bunkum and code generation abilities are very limited, compared to GPT-4o or Claude 3.5 Sonnet, heck even tiny 4-bit quantized 14B local LLMs are way better at code generation (Qwen 2.5 Coder).
There’s too much choice for the consumer to charge for it. If not Perplexity then I can just use Phind, ChatGPT, or Claude for free.
Google got off the ground because they had magic sauce that made their product noticeably better. LLM-based search engines don’t have that, especially when they’re using an LLM built elsewhere.
I remember at the beginning Google had the most user friendly ads back when agressive pop-up ads were everywhere. But once they grew they changed all that.
What's up with every AI company having a $0 plan and a $20 plan? I would pay for a lot more of these tools if they were $5 (obviously with less capability than a $20 plan), but I don't use any one enough to justify nearly $300/year (post tax).
Farther up, someone else was complaining about a different tool costing $5/mo but saying they’d pay $3/mo for it.
Everyone having a $20 price point probably means that that’s the point they think the customers will pay for it. Will introducing a $5/mo tier quadruple their paid user base? My guess is no, but that a lot of the people currently paying $20 will drop to paying $5
> Isn't payment processing just single digit percents?
It is usually a fixed component + a single digit percentage. For larger payments the fixed component becomes largely irrelevant. For small payments it can eat up most of the money involved.
As a quick example, Stripe's standard price for a credit card transaction in the US is 2.9% + $0.30. For a $5 payment that's almost 10% in direct fees, which is just about low enough that this is often where saas pricing starts.
This assumes you do tax calculation yourself (or ignore it until you're big enough) and handle fraud detection yourself. If you pay Stripe for these you're paying a significantly larger fixed fee.
There's also another significant risk at such low prices: In case of a disputed payment, which can happen a long time after the payment and will likely be more frequent if you don't pay to proactively deal with fraud, Stripe will charge you a $15 dispute fee regardless of the end result.
It is extremely far from "no one".
[0]: https://www.youtube.com/watch?v=FWPmu_rKxJo&t=185s