Implement regional pricing

Vlad

I think at this moment Kagi's opportunities for growth are plentiful. There are 1.5 billion people with an iPhone, a not-so-cheap device that costs the equivalent of 10 years of Kagi subscription. And Spotify has 250 million subscribers, paying similar to what Kagi costs, and Kagi is arguably a better use of one's money as it makes people more productive and more competitive in the modern world.

Kagi is now at just 25,000 customers so there is plenty upside opportunity for growth (10,000-100,000x based on above numbers). So basically sky is the limit.

I do agree that everyone deserves to have access to a search engine that has their best interest in mind, not just those who can pay for it. This is a social and economic problem and one way to solve it is for goverments to create ad-free search engines for their citizens, with their best interest in mind, similar to the role public libraries held for centuries. We'd be happy to partner with such forward thinking governments around the world in providing this service.

Kagibeh

Vlad

Spotify has 250 million subscribers, paying similar to what Kagi costs, and Kagi is arguably a better use of one's money as it makes people more productive and more competitive in the modern world.

Here's what Kagi tells me about Spotify:

Based on the available information, here are the key points about Spotify's regional pricing:

Spotify prices can vary significantly around the world, ranging from as low as $0.66 per month to as high as $16 per month.

The cheapest places to get Spotify Premium are countries like Nigeria, Egypt, and Pakistan, where it can cost less than $1 per month.

In contrast, Spotify Premium is most expensive in developed countries like Denmark, where it can cost up to $15.84 per month.

The price differences are due to Spotify's regional pricing strategy, which takes into account factors like local purchasing power and competition.

Again, if nobody sees a problem, there's nothing to solve, but then there's also no need to bend the facts in the process. 😉

It seems to me like some of the posters in this thread have fairly limited understanding of the world economy and the concept of money, but luckily, that's not really relevant for this topic. Only two things seem relevant:

Kagi NEEDS to earn more money than they spend (or else they will fail financially).
Kagi WANTS to bring their version of the internet into homes worldwide (or else they will fail their mission statement).

Ironically, those goals are not so far from Google's (who aim for profits and world domination), so it's not like the problem hasn't been tackled before. As I've pointed out above, Google's solution is to have the users in the countries with the highest GDP subsidize the poorest. Doesn't mean that Kagi has to do it as well, but it's not like it hasn't been done before, and it somewhat disproves the claim that search cannot be discounted - the only prerequisite is that you make enough money overall.

As C1231 pointed out, another vector would be to find ways in which Kagi can save money (and I do think there's quite some potential). These savings could be used to either finance regional pricing, or to lower the nominal fee for all.

Logically, yet another approach would be to find additional sources of money. OldMan973471 hinted at this, although I find it frighteningly unimaginative to assume it can only be achieved by "selling out". Check out this thread for example - that's what it's all about.

C1231

@Vlad is there any idea to work around the regional pricing idea? Because what regional pricing wants to archive is cheaper subscription. If it manages to do so for everyone, the better.

For example, I just use search. Nothing more. No fastgpt, no summarize, no assistant, no quick answer. Nothing. Just search. I want a list of results and I want them fast and reliable.

So it seems Kagi has huge costs per search that is preventing Kagi from offering a subscription that is effectively cheap? And this is the issue to tackle. Bring the cost per search down and Kagi is going to be able to offer lower subscriptions plans.

In April I did ₁₀₀₀ searches. That's more than $0.01/search with tax, which is super expensive in this context!

I really enjoy Kagi but there's the constant feeling that I'm overpaying for it.

Vlad

C1231 95% of our cost is search. Also a single search costs us 1.5 cents to deliver, so at 1000 searches/mo, assuming you are on $10/mo subscription, Kagi is losing money on you.

If we are able to reduce the cost of search, we would just reduce the price for everyone, we would not discriminate users based on location.

Regional pricing is typically what companies with high margin products do, or in cases where the cost of goods to produce depends on the location. But searching the entire web costs the same whether done from a desert in the middle of nowhere or from New York, and the results are same high quality Kagi results in both cases so "regional pricing" is not possible.

carl

As with any other product or service, the price is what it is, isn't it? And it is up to each and one of us to decide whether it is worth it or not. I personally think it's a great value at 10 dollars per month. Who said a high quality search engine should be a bargain product, peddled for cheap? For bargain hunters there are plenty of free options such as Google, with their own pros and cons. Because if we're being honest, if Kagi was 5 dollars or even 1 dollar, people would still complain that it costs too much. 10 dollars is accessible for those who really want to have it.

C1231

95% of our cost is search. Also a single search costs us 1.5 cents to deliver, so at 1000 searches/mo, assuming you are on $10/mo subscription, Kagi is losing money on you.

That is expensive. A lot. I really hope that you guys are able to tackle the challenges of folding down 10x or 100x that expense 🤞🍀

If we are able to reduce the cost of search, we would just reduce the price for everyone, we would not discriminate
people based on location.

agree

OldMan973471

The only way I see Kagi being able to reduce their pricing is if they sold out like every other company does - selling user data, doing ads, accepting VC money (which I assume comes with strings), trying to sell other products that may bring more profitability, etc.

The term RWP is a political term that really has come out in the last handful of years (especially recently). California is very diverse. To single out a specific skin color is....

Vlad has an excellent point - 1.5 billion iPhone users, 250 million Spotify subscribers, etc. I remember going to South America and seeing how expensive an iPod was (wow).

Biggest reason why I use Kagi is because it respects my privacy when it could easily do what every other company out there does - sells user data to make billions. I feel bad if I go over the 1.5 cents per search count per month with what I'm paying cuz I know I'm costing Kagi money and I want them to succeed because I really like their service.

On subject question: Even if Kagi were to have local servers to XYZ country, it wouldn't really change anything. Kagi still has to pay the 1.5 cents per search indexing costs regardless of location and employee/rent/hardware/etc. I imagine Google makes more money from affluent (note no skin color focus here) search users vs users from less affluent countries and that profit covers that.

Vlad

OldMan973471

Even if Kagi were to have local servers to XYZ country, it wouldn't really change anything. Kagi still has to pay the 1.5 cents per search indexing costs regardless of location and employee/rent/hardware/etc.

Correct. It is actually more expensive for us to serve searches regionally, beause in addition to the cost of search, we need to add additional infrastructure in the region to reduce latency.

We currently use 9 regional datacenters https://help.kagi.com/kagi/search-details/search-speed.html#data-center-locations

IshanJalan

carl To this point, the physical iPhones might be more expensive in India but Apple One prices are extremely cheap in India. I'll post prices:
Source: https://www.apple.com/in/apple-one/

Individual plans:
USA: $19.95 per month
India: ₹195 per month (US$2.34 per month)

I understand they aren't equal comparisons but there is similar differences in pricing for Steam Games, Youtube Premium, Twitch Subscriptions, Spotify, etc.

Here's some PPP data: https://shiftnudge.notion.site/PPP-Discounts-86a674a50b7546369e7a0ff9cdb537d3

Vlad

IshanJalan That proves my point. Things that have hard cost such as iPhone or Kagi Search can not be discounted locally. High margin products can.

eskidost

Kagibeh

Again, if nobody sees a problem, there's nothing to solve, but then there's also no need to bend the facts in the process.

I think you're misunderstanding what is being said. People are acknowledging that it may not be fair (and the world isn't fair, sad but true) but Kagi is predominantly a premium product by definition and when unit economics don't work out there isn't much that can be done by Kagi at this stage to fix this. I think @Vlad's answers explain the situation well.

eskidost

Kagibeh

It seems to me like some of the posters in this thread have fairly limited understanding of the world economy and the concept of money, but luckily, that's not really relevant for this topic. Only two things seem relevant:

Also if I may, you are making way too many assumptions in this thread, like "rich white people" "you don't understand world economics" "there is huge potential to save money" etc..
1) What you're saying is not a novel concept and people are able to understand things when you explain it to them.
2) It's impossible for you to know that there is a "huge potential for savings" without knowing the inner workings of Kagi. It can even be interpreted as rude, because there is this person who has been working on this thing for 7 years or so at this point and probably knows the pricing inside out, and he tries to tell you that this is how the unit economics work, and you come back and tell him that "No you're wrong, there is a way to do it cheaper". Like it is maybe possible that you know it more than him, but you are giving very superficial examples and comparing Kagi to juggernauts like Apple, Google, Spotify, Youtube etc. so it makes me think that you actually don't know more than him but just trying to enforce your opinion on others. These are basically different companies in different stages of financial independence and I don't think it's a fair comparison.

I am indeed from a country with a very low income and even for people who aren't, it's not hard to understand the implications. It's just that there is not much that can be done by Kagi is what I understand from @Vlad's messages and I respect him and the team enough to know that if there were a way to do it, they would be trying their best to do that, but right now it is just what it is.

eskidost

Also examples from Youtube, Spotify etc aren't a good comparison because the subscriptions remove advertising and the amount of advertising revenue per click/view differs based on region, in other words the amount of money Youtube gets from a free user by showing them ads is more in a high income country and less in a low income country, so it makes sense that they adjust their pricing based on that. It's not like that for Kagi. Data centers don't charge Kagi less based on where queries originate from, so it's not a fair comparison to cite Spotify, Youtube etc. Also Apple is a silly comparison as well, they are the world's most valuable company with billions of cash while Kagi is trying to find its financial footing to guarantee longer term survival.

Kagibeh

eskidost As to not let the voice of ignorance have the final say in this thread...

As Kagi is a privacy oriented search engine, there's indeed quite some stuff that the Kagi folks can't know about. By my own estimate, at least 20% of my searches are utterly wasted, and I'd be surprised if anyone elses percentage is much better - that's what I was thinking about when I mentioned the potential to save money. That is not an insult, it is a mere observation, and if at all, it is you who is rude for jumping at me like that.
I also think you are hurting the potential of this forum by attempting to silence people who are trying to keep an open discussion, but at the end of the day, it's up to Vlad and others to decide, and if they let it fly, so be it. And it is fantastic that you respect the Kagi team enough to know they're trying their best, but this is a feedback forum and not kagirespect.org or kagiyouguysaredoingthebestanyway.org so in the rare cases I still show up here, I will not refrain from giving my honest opinion on what I believe could be improved, if it is ok with you.
On a personal note, neither "there is huge potential to save money" nor "No you're wrong, there is a way to do it cheaper" are actual quotes from me (nor is "you don't understand world economics" for the matter). Similarly, it is not me who compared Kagi to Spotify - I simply picked up on a comment by Vlad - and I never even mentioned Apple or Youtube in this thread. I'm out of here, but if we ever meet again in another discussion, I ask you kindly to refrain from twisting my words like that in the future (or if you insist on making these things up, at least do it in a thread where I'm not participating). Thank you.

LuizCVBSJ

Hello there, another Brazilian here, student in tech, I found this thread envisioning the same thing, the possibility of regional prices, but then some very smart people on this thread showed that it is not so simple as just lowering the price because of the current financial situation of the product.

Alright, I think some of you raised good points, and the way I see it, Kagi has a fixed cost per search and is (from what I understood) still in the path to become truly profitable, something that we as users want to, right? Otherwise, this product would eventually cease to exist as we know, for it is a product, thus it needs to be profitable.

We all like Kagi so let's hope it keeps on going.

That all said, I believe we should try to come up with ways to make the company more money without throwing away the essence of the product, or maybe lower the costs, not sure that it is even possible. If that happens, then we can discuss for a lower price or opportunities to bring discounts and such in a manner to make this product reach more people.

I am not one of the smart people who can come up with such good ideas, so maybe someone smarter than me can follow up?
What do other companies do that Kagi could also do that won't compromise its values and the core proposition of the product?
Sell T-Shirts? (Evidence number no.1 that I am NOT one of those smart and creative ppl)

lr0

Agree with LuizCVBSJ. Kagi seriously needs to consider a student plan.

ajith

By observing the discussion, I can conclude that:

The pricing is set to justify the operational costs without compromising with the ideals and core values.
Kagi doesn't make much margin to offer discounts on its subscription, unlike other services.
If it were to offer discounts, it would be through Government sponsorships or other privacy-first initiatives.

I cannot agree more with some arguments made here about:

Increasing the reach of Kagi, hence aligning with the Mission Statement
Decreasing the prices by decreasing the operational costs

Search costs make up 90% of Operational costs as @Vlad pointed out, with 1.5 US Cents per search.
My questions are:

Is there a way to bring the search costs down ?
Can Kagi run its own search indexing without relying on external providers, at least in the near future ?
If yes, will it require a substantial sum of money ?

I love Kagi and have no complaints over anything. The only bottleneck in the whole process is "Per Search Cost". If it were to be optimized, the target audience would be inclusive of all strata of the economy. I really believe that the arguments made in this thread are in good faith, only to improve kagi but may have sounded otherwise. I love to see Kagi addressing this issue and propel to greater heights.

Vlad

ajith

If it were to offer discounts, it would be through Government sponsorships or other privacy-first initiatives.

If we are able to reduce price we would do it for all users. If any government want to subsidize the cost for their citizens so they can use Kagi, we are completely open to it. Bottom line is that search is not free and someone has to pay for it. It also costs the same to search no matter who is making the search or where from.

Is there a way to bring the search costs down ?

Not without also reducing the quality of search. And nobody wants to pay for bad search.

Can Kagi run its own search indexing without relying on external providers, at least in the near future ?

We already have our own index, but again nobody would pay for it. It is not enough.

If yes, will it require a substantial sum of money ?

Microsoft spent 20 years and $100bn building Bing and I do not think anyone would pay for Bing quality of search.

Also to add that it does not make sense to offer any search plan for less than $5/mo as credit card processing fees are already eating 10% at $5 and this would get closer to 35% at $1/mo.

carl

Why do you assume that the price should go down if Kagi can bring their operating costs down? It is standard procedure for companies to try to bring down their operating costs, but they do that also to increase profit, or to build up cash for investments.

Tomodo

Have you considered caching ur external search api calls. I’d assume, naïvely, maybe at least 20-30% of searches are not unique. Does google tos prevent that? Sounds like a worth while risk even if (after speaking with eff to see if they would defend you probono). Or does your privacy focused architecture prevent it?

RoxyRoxyRoxy

Tomodo That's an interesting thought, there's a few privacy-preserving ways to go about that I can think of (of course I don't know about Kagi's backend!) but I think there'd be a few issues besides any TOS violations.
How often would this cache update? Might be kind of annoying if some searches are a day or more outdated. Could be solved by exposing the fact it's a cached search to the user and letting them choose to use an un-cached search, though that might negate any money saved.
How big would this cache be? Considering we only have 20k chars of custom CSS it might be fair to say Kagi wants to save storage space where possible, this would have to be weighed in the pricing of cached vs un-cached too.

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