Suggestion #1 - Drop the price


#1

Drop the price.

This "new’ technology, make your dough for the IPO business model is really, really unfair.

The Rachio should be selling for about $89.99, by the millions. Someone needs to take an upper division marketing class on pricing models.


#2

I’d love to get the Iro into millions of households, but hardware isn’t cheap to build :wink: and our margins are consistent with the rest of the industry.


#3

edit: took out snipe at marketing ppl.
or maybe you should take a class on operations management or “research and design”?

it takes money to run servers (cheap).
it takes money to distribute these servers in a fail safe fashion (kind of cheap).
it takes money to get the real time data feeds of all of the weather stations out there (not cheap).
it takes money to pay ppl to answer the ungodly number of legitimate questions that ppl have about water management (really not cheap).
it takes money to develop new features…and they dont charge for those features (look at flex schedules)…the model here is software…they continue to provide enhancements at no cost to the owners of the devices nor do they require you to shell out more money for more “properly upper divisioned hardware” (expensive).

if they sell it at 89.99, do you really think ppl want to pay a monthly fee for the product to continue to operate? i for one do not…plus, i know some seriously cheap asses out there that would discontinue service until the growing season is back on and plotting a predictable revenue stream around that behavior is a path fraught with peril.

if you want a $90 dollar device, go buy you a $90 device and reap the $90 reward that comes with it…i personally am going to stick to the rachio…


#4

Yes, you have a good price.


#5

I think it ia a fair price, considering the quality of care it provides for your yard and the cost and resource (water use) savings you get. I’ve saved 4,000 gallons of water this month alone, and I think that will add up over the lifetime of the device.


#6

Ha! You are talking to a Price Analyst/Contract Administrator with 45 years of business experience, 20 years being in positions overseas, manufacturing and importing into the US.
You apparently have the wrong people trying to coordinate sales with Engineering (You DO do that, correct?).

This is a very simple item with basic existing, and very old, technology, melded with some cheap Wi-Fi chipsets and software. If you are paying more than $17 to build the unit in China (packaged and delivered), I’d be shocked. Absolutely shocked.

And if you are, you need to fire your Contract Negotiator.

And China builds the iPhones so don’t pull my leg about build quality. It’s up to your Management to attend to site visits and ISO certifications. Frankly, the current pricing - which in my opinion severely discourages homeowners from moving to new technology - is a function of mismanagement and greed.

When you market to the billions of people on this planet, you need to stop thinking “Rolex” and start thinking “Bic pen”. Your IPO would go far better if you were moving 5 or 10 million units a year.



#7

put your dick away billy. try the b and e pain olympics if you want impress ppl with it.


#8

@WilliamHarper @plainsane Great discussion for sure :beers:

Everything is currently built in Colorado, USA.

To @plainsane’s point, you get free software upgrades for the life of the product. Since last year alone we have had about 19 releases to the app store and have been working 6 months on our 2.0 release.

So, it is far different than buying a piece of hardware that you put on your wall and is not constantly being upgraded with new features.

I’m sure Nest gets amazing QOS producing in China, is the market leader for WiFi thermostats, and their hardware is still $247.

:beers:

Ok, back to writing more software!


#9

Hey lets keep it civil, everyone is entitled to their opinion.

:beers:


#10

plainsane

Edit? Indeed… odd comment from a poster with an obscene gesture on your profile photograph. Perhaps YOU should be edited. Are you a Rachio employee?

Weather data is accumulated by Government sources; if Rachio is wise they will use public data - they aren’t buying it, or are you stating they are?

You suggest that by paying $250 or $300 that a customer is investing in an annuity for free data - forever? Or is this a Ponzi scheme where new sales in the future constantly fund the old users… or eventually a “Plus Up” future in the future - “Sorry, folks have to pay for data now”.

Part of business, my rude friend, is to look for efficiencies by, for example, automating as much as possible to eliminate expensive oversight. All the tasks you mention can be reduced in cost significantly, over time, IF Management is serious about being efficient. But when the margins are so high, as Silicon Valley LOVES… the incentive is not there to save money, but to create personal wealth. You are probably to young to notice but the Internet Bubble of 1999 proved this point.

Business requires specialized training, which I am fairly certain you do not have, ergo your angry snipes.

Have you ever designed a product? Worked through iterations of prototypes? Drafted packaging? Interfaced with the Advertising department? Coordinated order quantities with Finance? Projected sales, profits, cash flow, distribution? Pricing?

I have.

No, I didn’t think you have ergo, you don’t know what you are talking about. And as Thumper’s Mom once said regarding Thumper’s comment about Bambi, “If you can’t say anything nice, don’t say anything at all.”


#11

I’m the only employee and co-founder here.

Not free data but free feature upgrades for life.

The quality of weather data we use is far from free, especially the aggregation of personal weather station data. We are also looking at other sources of weather data that are fairly expensive. Garbage in, garbage out. The closer we can get to installed Iros the more savings you get.

We need to get more scale, then we can focus on efficiencies :wink: Our investors will demand it.

I have, and the total BOM and company burn is much more than I ever expected.

:beers:


#13

no…

no, im suggesting that the price has 5-7 years of data subscription built in. the device will die, and you must buy a new one thus you get a new data subscription.

i assume they are paying for the data, big assumption, i dont know, i dont work for them. but having dealt with data made available to the public for free (which you clearly have not), has taught me many lessons in the value that a third party provides for sanitizing/normalizing the data and producing machine digestible formats.

yes, 9 now. fraud prevention, network security and data center management.

thats funny, you should probably take the advice as well? recommending to fire people is not a “nice” thing to say, is it? im sure you will justify it though yet you continue to insult other ppls intelligence, and im the one that needs to be nice?

oh, is this “nice” as well?

i probably need a primer in “nice” because i would not classify that as “disney bunny thumper nice”.

really, the only problem i have, and recognized from your very first post is that you have very little idea what you are talking about yet you still feel empowered to begin a basic but broad insult of some unknown person’s intelligence. im not a fan of that…i HATE it when someone shows up on a forum making strong assumptions that someone is doing a bad job, based on 0 facts. your arrogance far extends your information.

so i apologize about making my statements, they were rude, but lets not pretend im the only one here…

@franz, feel free to take down my post. i realize it is not professional, but i dont care, this is a soap box post and i will steer clear of them in the future.


#14

Okay to the folks that want to drop the price are you willing to flip it to a subscription model? This does rely on cloud services/servers that once the unit is purchased, at the present time we’re not paying for over time but funding up front.


#15

Hi Susan:

Good question. For me, I’d like to consider if I want Cloud data, at a later date.

Let’s say that Rachio has 2 million units fielded (in the future). If they charged a minimal $20 per year for predictive weather, and had 1M paying customers, that $20M in cash flow would be a very good stream of cash that ‘should’ far and away exceed costs. Good deal for them, god deal for the customers who want that.

Annual pricing has to be “reasonable” so that Customers won’t think about it, and will stay connected, figuratively and literally, to the company.

The hardware, if carefully farmed out to the correct subcontractors, could still provide a very good income (profit) even with, let’s say, a $90 price point, Lower prices mean better exclusion of competitors (important) AND more customer base. In these types of products, the victors have customer base, not necessity the highest profits per sale.

In my case, I want reliable Wi-Fi control to set schedule (only) local device. I don’t really care about weather (yet) as it rarely rains here and we can only water 3x a week anyway (legally). And THAT legal restriction is why I want water schedule controls, not anything else at this time.

So, I see some business areas where Rachio could improve. Of course, I want them to get rich and do well. But I think the entry price is too high and is a bad omen to viability, particularly when there is so much interest in Smart Home products this year. It is a given - in 12 months there will be 5 to 7 competitors and I guarantee 1 to 2 will be as good or better. And many far cheaper.

Granted, cheaper isn’t better, but if I were Rachio, I’d do everything I could to avoid losing the low end of the market. Best Buy and Home Depot will assuredly drop Rachio like a hot rock when the next new, cheaper, higher-margin controller comes out. And it will be out. We are simply watching the clock now. Not “if”… it is “when”!

The COMDEX Consumer Electronics Show, held annually in Las Vegas (January), was swarming with new products in this field. This is no time for Rachio to sit on their laurels.

Good luck to them.


#16

And Nest does not listen to their customers! Look at the number of requests on their product suggestions for such a simple thing as being able to see the ACTUAL temperature on their thermostat. Over two years and still not provided.

Rachio actually cares about their customers. Their people monitor and respond to this forum. They add features people actually want (when possible.)

But I suppose that WilliamHapter is really a troll in shoddy disguise. Personally I think the product is worth the cost and so does SocalWater$mart who is going to rebate me the cost for its water savings.


#17

I was at Comdex. I saw a few sprinkler systems but not swarming of products. Health and fitness bands, now that was swarming for sure. My point is you have cloud servers now. In order for it to send alerts to your mobile app, for your mobile app and web app to all share data, there’s a cloud server in the background. I am CONSTANTLY rebooting consumer routers in my house so the idea that wifi is robust (especially with the consumer model routers) is a joke. I do like the integration with the weather station as it has indeed stopped my unit from running and there has been many a time I’ve turned a sprinkler clock off in a rainstorm only to forget to put it back on.

We have a 2 a week water restriction, and I live in California so I know all about droughts and having a unit that does hook into my local weather station and turn it off is a plus.


#18

As an aside my Nest Protect is offline right now and I’ll have to go reboot the router again to get it back online. So home consumer wifi routers are less than ideal for sure.


#19

yes, they are which is why im running ubiquiti here at the house. this dood was either trolling, or he works for such a big company, his view is skewed (or warped) and has no idea what it takes to bootstrap anything.

i think this thread should be locked…


#20

Yes, this was trolling, will know better next time.


#21