One of my favorite films in the last decade was Blackberry. The scene where the Blackberry team watches Steve Jobs introduce the iPhone was beautiful.
https://www.youtube.com/watch?v=DosL_a7V_bQ
When the iPhone was released, the entire mobile phone industry was disrupted, and many legacy providers even had to later exit the hardware manufacturing to pivot to other industries.
I feel the same way about the industry as when we launched IPinfo Lite. Sure, we talk a lot about IPinfo’s ProbeNet, but when it comes to product divisions, IPinfo Lite changed a lot of things. Major OSS, enterprise, and even government agencies adopted and rapidly embraced a “free” service. And we somewhat disrupted the entire industry.
New entrant providers
I believe that starting an IP geolocation company is probably one of the easiest side projects, hustle you can do.
It is an API service on top of a database. Considering there are plenty of free databases out there (even our IPinfo Lite), you really do not need much to “launch a company” by layering an API service and Stripe checkout.
Post 2020, I have seen several IP geolocation companies being launched. A solo founder, influenced by the Twitter indie hacking movement, launching an IP geolocation SaaS was quite normal.
The primary revenue model that I have seen is volume pricing. You pay for API requests. You can do 100,000 or 200,000 API requests for $4 to $10 a month. The pitch was not accuracy; it was volume. Why pay a premium for accuracy?
Then we released IPinfo Lite’s API service. Truly unlimited requests. Currently there are entire firewall, DNS software that use the API service and individual tokens even account for 2 billion requests per month.
You know how much companies are paying for 2 billion requests per month? $0/month.
Because accuracy was never the focus of the younger companies, and we are coming in with a truly unlimited API service for free, it kind of disrupted the outdated industries.
You can still probably sell to some people because of the city level or bot detection pitch, but if the accuracy of the data is questionable, you might as well use the capital city of the country and just use IPinfo Lite. You might as well curate a list of ASN domains and create a DIY bot detection layer using our IPinfo Lite.
I think for new companies trying to enter the industry, we have created a very hard entry point to break even.
Legacy providers
Disrupting legacy providers was quite hard because of the policy of “good enough” and “why fix it when it is broken.” Well, for some enterprises, it was broken.
When it comes to free IP databases from legacy provider there was two caveats:
- Free databases were intentionally compromised for accuracy in order to upsell users to higher accuracy data.
- Free databases come with an EULA (End User Licensing Agreement) that permits the usage of the data for internal use within the organization.
Now that is the condition with the free database. If you ever purchase their “premium version” of their free data, you are in no way permitted to distribute the data to end users. You are only limited to using the data internally. If you distribute the data, you will have pay mid to high five digits sums per year. No wonder why there are so many new IP geolocation companies.
Then we released IPinfo Lite database.
IPinfo Lite created a big problem in the industry. It is not accuracy compromised. It is a full accuracy database whose accuracy goes down to individual IP level. It is the “premium” database that just happens to be free.
Now, there is a difference between IPinfo’s accuracy and the rest of the industry’s accuracy. We are leading the industry when it comes to accuracy. And guess what? We just decided to share that level of accuracy for free with our IPinfo Lite database. It is already more accurate than anything you can buy with money.
It is very hard for some people to grasp what we are offering:
- Legacy providers provide free databases that are compromised in accuracy.
- There is a premium/paid version of the free database.
- IPinfo’s data is better than whatever paid version of accurate legacy providers can sell.
- IPinfo Lite is free. It is simply not better than the free counterpart; it is hands down better than whatever you can even pay.
Now, everyone knows we are accurate. So, did everyone ditch their legacy providers’ data and jump to us? Surprisingly not. You need a driver to have engineers write migration code, which can often result in service disruption.
Even with superior accuracy and our data being free was not moving businesses and agencies to adopt us.
So, why did some and more companies recently start adopting IPinfo Lite.
The fine print.
The free databases provided by legacy providers are subjected to redistribution licensing. They require an EULA and end users to sign up to use the service. That creates friction. Now, even if you pay for the premium data, you can be charged 8 to 10 times more to distribute the data to end users.
And all legacy providers actually do enforce these licensing rules.
So, at that point of legal issues, decision makers of companies ask developers to write the migration code since it creates legal and business risks. Developers themselves are happy to write the migration code as adopting IPinfo means better data and robust support.
Our licensing terms for IPinfo Lite, being CC-BY-SA 4.0, allowed many companies to confidently choose us.
We have seen ancient systems that relied on a legacy provider’s data for more than a decade switch to us because of a combination of licensing, accuracy, and support issues.
We permit redistribution (in fact, we encourage it) of IPinfo Lite data. We say, embed your token into the front end, deliver the database with the software. Just make your users’ lives easier.
Through this we started to chip away at legacy providers.
Lots to learn from the iPhone story. We do not like to do flashy marketing and do not throw words like “disruptive” or “game changer”, but we have to admit IPinfo Lite has had a major effect on the industry.
IPinfo Lite was not designed as a revenue driver, but we believed that the internet deserved better. We launched IPinfo Lite to share our data with everyone from open source project to mission critical national and continental security effort. In that process, we may have disrupted the industry, which is a consequence but not an intention from our end.