This is the best job I have ever had, and the most fun I have ever had at any company. ![]() :-) So we get this nice job at a fun and relaxed place to work, and customers get a fairly priced backup solution. I’m quite looking forward to the first keg of beer it chills. Recently Backblaze bought a “Kegerator” (chills beer) that is setup about 10 feet from my desk. This whole system lets those employees live their lives, make housing payments, raise children, have a fun job where we can bring our dogs to work and eat all the free snacks and food the Backblaze employees want while at work. ![]() Now, that INCLUDES the market rate salaries of all 145 employees, so we are PERFECTLY HAPPY with this situation. So far, for all 13+ years of our existence, at the end of every year when the dust settles Backblaze essentially “breaks even” - there is no money in “profit”, but at the same time there was not a significant “loss” either. Smaller data customers don’t mind as much, but then again Backblaze makes more money from them so it isn’t as big of a loss to us. The only reason this is not a widespread “problem” for us is larger data customers do not like to re-upload data once per year. If a customer has a small amount of data, they CAN create a new account once per year, and if they can get ahold of one of these promotion codes at the EXACT right time - they can re-upload their data on their anniversary using this new account. Since Backblaze has no deep pockets - no investors, no VC money backing us, we would go out of business if people could get ongoing deep discounts every year. What all of this also means is if we allowed GroupOn codes for renewals we would lose money. Why do we do this? Our rationalization is that 1) bigger customer numbers and thus higher revenue numbers increase our scale which allows better deals on drives and datacenters and everything else, and 2) happy customers recommend the product to other people - who pay “list price” and so we profit from the viral effect in the long run (while not making or losing money on the original customer). But we do not take a loss either, it is break even for us. We provide the service for “free” to that customer. Incidentally, this is about our profit margin, so Backblaze makes $0 on that customer (on average, based on how much the customer stores each customer costs us money or loses us money, but on average it is a wash). Since the average customer stays with Backblaze for 5 years, this $45 “cost of customer acquisition” is approximately 15% of the lifetime value of the customer. ![]() The new customer cost Backblaze $45 in lost revenue to “acquire”. Groupon gets half of the $30 ($15) and Backblaze gets $15. ![]() Here is the math: if the “introductory offer” through Groupon is half off, then a one year subscription costs the customer $30 instead of $60. This causes our support team ENDLESS problems everytime Backblaze marketing does one of these, because existing customers don’t read the fine print, buy them for renewals, then get frustrated because the codes are rejected automatically. To be clear, any promotions (like “Stack Social” or “GroupOn”) sell Prepaid Codes that can ONLY be used for a new account, not for renewals. :-)ĭo I need to wait for Black Friday or Cyber Monday to get the best deal? Disclaimer: I work for Backblaze so I’m biased.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |