DevTools Brew #11: How Algolia Built Their Most Customer-Friendly Pricing Model Ever,How To Hack Hacker News, Inside Datadog’s $5M Outage...

May 20, 2023

Welcome to the DevTools Brew #11!

My name is Morgan Perry, co-founder of Qovery, and this is DevTools Brew newsletter, a weekly roundup of the latest trends and insights in the infrastructure and devtools world.

In this Issue #11:

📈 How Algolia Built Their Most Customer-Friendly Pricing Model Ever
💻 How to Hack Hacker News (And Consistently Hit The Front Page)
⭐ Star History Weekly Pick
🚨 Inside Datadog’s $5M Outage

I hope you will enjoy this sneak peek.
Let's dive in!

I usually start each edition with the latest fundraising rounds in the devtools and infrastructure space. But this week, there is no notable fundraising news, so let's go straight to the 3 exciting topics of the day!!

📈 How Algolia Built Their Most Customer-Friendly Pricing Model Ever

Today, let’s delve into the fascinating world of pricing models and customer-centric strategies. Get ready to learn how Algolia, the search and discovery experience platform, revolutionized their approach and built their most customer-friendly pricing model ever!

Algolia has come a long way since its inception in 2012. With over 8 pricing model evolutions, they've continuously strived to find the perfect balance between product-led growth (PLG) and sales-led growth.

Curious about how Algolia made this transformation? Let's dive into the key highlights:

Key Highlights:

Algolia’s Pricing Journey

Initially, Algolia had a usage-based pricing (UBP) model that was product-led growth (PLG)-friendly.
However, they later adopted an extreme feature-gating approach, reserving most innovation for enterprise plans, which affected their sales and community goodwill.
In 2019, Algolia decided to revert back to UBP and PLG roots, aiming for a developer-centric, bottoms-up approach.
They launched a new pricing model in 2020, focusing on five principles:
- 1. removing friction for "try and buy”
- 2. increasing access to innovation
- 3. making pricing transparent
- 4. charging only for what is used
- 5. encouraging customers to grow
Algolia allowed existing customers to retain access to the old pricing while introducing the new model, and a significant percentage of customers voluntarily migrated to the new pricing.
Algolia integrated a sales-led approach with their PLG core, leveraging both models for different use cases and industries.

Algolia’s Key Lessons about PLG Success

The importance of not sacrificing the PLG model for the sake of growth and recommends taking the time to implement the usage-based pricing (UBP) correctly.
Adopting a PLG mindset throughout the company is crucial, with a focus on maximizing the product experience and involving external perspectives to challenge internal teams.
PLG is a long-term game, and patience is required as new customers ramp up their usage, and revenue per customer may initially appear smaller compared to a sales-led business.

By embarking on this remarkable transformation, Algolia not only improved their onboarding process and self-service experience but also strengthened their commitment to product-led growth. Their dedication to creating a customer-centric pricing model serves as an inspiration for businesses looking to revolutionize their approach.

—> Check out the full article published by OpenView

💻 How to hack Hacker News (and consistently hit the front page)

Thrilled to present to you a great article that delves deep into the art of "How to Hack Hacker News (and consistently hit the front page)" authored by Iron Brands. Getting featured on the Hacker News (HN) front page is a coveted goal for many devtools founders. The author discovered a repeatable process to consistently get to the front page of HN that will revolutionize the way you approach Hacker News.

Let’s dive in!

Key Takeaways

Understanding Hacker News

Understanding the HN audience is crucial. They have high standards and prefer content that is newsworthy or investigative.
Newsworthy articles should be relevant to the HN community, while investigative articles should involve research and valuable insights.
Timing is important when posting on HN. Weekends have less competition but still attract significant traffic.
It's acceptable to post multiple times on HN to increase visibility, but don't overdo it (2 or 3 times at most).

The War Room’s Strategy

Engaging with the audience is key to success on HN.
The author's strategy, called the "War Room Strategy," focuses on ranking with newsworthy articles.
- Step 1: Stay on top of news relevant to the HN community using a "newsbot" that fetches data from Hacker News API and Google Alerts.
- Step 2: When relevant news is detected, enter "War Room mode" to investigate and write an article that provides context and implications.
- Step 3: End the article with a section called "Final thoughts" where you can subtly promote your product or service.
The strategy aims to provide timely and valuable content, combining timeliness and value for HN front-page success.

Side-effects

An unexpected side-effect of this strategy is improved SEO due to backlinks from other websites.
The author's strategy has generated backlinks and increased traffic to their website.

Consistent front-page success is not guaranteed, but the approach has worked well for privacy-related or Google-focused topics.

If your audience is on HN, it's worth trying this strategy. Consistent front-page success is not guaranteed, but the approach has worked well for privacy-related or Google-focused topics.

—> Check out the full article published by Iron Brands

To gain further insights on how to secure the top spot on Hacker News, I recommend checking out the video Getting to the Top of Hacker News, from the Scaling DevTools podcast hosted by Jack Bridger.

⭐ Star History Weekly Pick

The Star History Weekly Pick is:

Windmill: “An open-source alternative to Airplane and Retool.”
- ⭐️ 4.4k stars reached
- Github: https://github.com/windmill-labs/windmill

🚨 Inside Datadog’s $5M Outage

The observability provider was down for more than a day in March. What went wrong, how did the engineering team respond, and what can businesses learn from the incident?

Delve into the heart of this incident and discover the secrets behind its catastrophic impact Exclusive content from The Pragmatic Engineer newsletter.