Ente – Opening Our Books

9 hours ago (ente.com)

This is one of those vanity blog posts, a “look at us, we’re open” blog posts without actual openness, or rather, limited openness where it helps their image and not openness that could backfire.

Businesses don’t operate based on revenue. They operate based on profit. They operate based on operating expenses. They operate based off of free cash flow. Showing off revenue and number of accounts is showing off a tiny portion of the picture, and says nothing about the health of a business.

If you’re looking to ‘be open’ about the health of your business, then the operating costs would be shared, the amount the founders are ‘taking out’ of the business in dividends would be shared.

There are businesses that operate 20MM a year in revenue, but practically speaking are broke, because of the way the business is being run.

So for folks that don’t know better, this is a very cool thing ente is doing. For folks that run businesses and know better, this is a way to show off and ‘gain cred’ without actually having to be open about how the business operates.

  • > "Showing off revenue and number of accounts is showing off a tiny portion of the picture"

    Showing revenue is not "tiny" by any means. Considering that the vast majority of businesses hide this from the public, I think it's very notably "something larger than tiny".

    > "but practically speaking [they] are broke"

    How do you know this?

  • I once worked for a company where they operated in the red for 95% of the year as they paid for project material costs up front. The CFO was quite open about how finances worked in our niche sector.

    A client would pay an invoice and the balance would swing from -£20M to £0 and back down to -£15M for the next project within weeks! Revenue was in the £100Ms per annum.

    As someone with almost zero business background it was a real eye opener how much we depended on a healthy relationship with the local bank manager. The business model clearly worked as they passed their 30th anniversary during my employment!

    • This is very common in a lot of industries especially physical goods and medicine.

      You end up leverage for all the goods but the final settlement of payment happens much later, making them hard to survive in without a lot of capital and good relationships.

      You can screwed very easily and understanding the model and not scaling faster than your capital allows is a skill in itself.

      My friend failed at it while I was working with them.

    • I worked for similar company. And yes, it basically depended on the relationship with the local bank managers and suppliers. Unfortunately, it wasn't so successful.

  • What's wrong with that? This is a post to show users that other people are paying for it (social proof) and that the project is developing well, similar to other projects sharing how many contributions or first time pull requests they got this month. That doesn't mean that you have to show everyones salary, how much the lunch in the office is costing and include a raw export of their bookkeeping setup.

    There's room for both.

    • The accompanying blog post says "The one thing you couldn't see was how well Ente is doing as a business. Now you can."

      To the parent commenter's point, we don't have enough information to know if that's true.

      EDIT: the founder is on this thread (https://news.ycombinator.com/item?id=48933905) providing more info and explains that adding expenses on would be too burdensome.

  • What an unnecessarily negative and cynical reaction to what is neutral at worst and positive at best

  • > Businesses don’t operate based on revenue. They operate based on profit.

    This does not bode well for the entire AI industry.

    • Public IPO as Ponzi scheme/shell game is a time-honored tradition. You can operate at a loss so long as you can get folks to bet they’ll get a return. The more people you can convince, the better you can do for yourself without being left holding the bag.

  • >Businesses don’t operate based on revenue

    Well, you have that right. But apparently they IPO based on even less.

  • All you saw on that page was the revenue?

    For a potential customer deciding whether to trust a relatively small app (compared to Google and Apple) with their memories, these are useful numbers. 50% increase in paying customers this year. Nearly half a million registered users, with a 40% growth in the last 6 months. 5% of their users are paying customers. Revenue topping a million. That's stuff I want to know if I'm subscribing and uploading all my pics to their servers. I want to know if they'll be around, and my stuff is safe.

    > So for folks that don’t know better, this is a very cool thing ente is doing. For folks that run businesses and know better...

    Oh please. Perhaps work on not jumping to conclusions too quickly.

  • > Businesses don’t operate based on revenue. They operate based on profit.

    The most difficult part of a consumer SaaS or really selling anything on the internet is acquiring customers.

    Zero revenue = zero profit automatically with no ability to ever make a profit.

    If a startup has paying customers there's at least the chance to become profitable.

Buffer.com is famously open as well, if you like this kind of stuff.

Revenue: https://buffer.com/metrics

Expenses: https://buffer.com/transparent-pricing

Salaries of every employee (which seems like PII to me): https://buffer.com/salaries

And more: https://buffer.com/open

I have been impressed with Ente products and customer service. It's good to see they are growing. That said, revenue information is not entirely helpful in a vacuum. I'd be more keen on seeing profit (even at a lower timeline resolution). What's the average cost for taking on a new customer? What's the retention/turnover? Etc. That said the products are great and I'd recommend them to anyone.

  • I wish I could say the same. I tried Ente the other day, to see how it compares to Immich, but it was very hit-and-miss. Face recognition for people never worked, no matter what I tried, for example.

    • Who knows what the problem could be - if you want to invest time into this, you could try collecting some debug logs to see if it indicates anything. For me and my family it works pretty well (~300G of data across 10s of thousands of photos / videos). Face recognition / AI search works reasonably well. It's not perfect, but I'm happy to keep our photos under our control rather with some big tech company which could decide on a whim to erase all of my data (or even worse, report me to the police and then erase all of my data).

      Of course I also dump all of the data about once per week on a NAS, just in case :)

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    • I'm in the same boat. I had a so many comments under Immich videos about Ente that it made me wonder if they were just bots.

      The client / server relationship with Ente is peculiar, and on my test dataset of about 1000 images did not perform at all. Face recognition, semantic search, etc, it was not in the same league as Immich tbh. (Also hi Stavros!)

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Kinda unrelated, but the art direction on Ente's site is really top-notch.

Happy to be one of those people contributing those numbers! :) It's a great privacy friendly service.

Are there any other self-hostable E2EE cloud products as good as Ente? This company is great. AGPL as well.

  • Well, not E2EE, but I like Photoprism very much for the self-hosted photosharing use-case. In fact, I tried Ente a while ago and am always impressed by their communication skills, but from a product side, I prefer Photoprism.

    I have a local instance running on a Raspberry Pi with about 149.000 photos inside.

  • What do you like about AGPL in this context? Building a similar product and curious! Thanks

    • I don't like copyright at all and I don't like the FSF but it protects the users freedoms which gives the community trust. With AI I think any copyright will be less and less important, though.

This is so cool. Congratulations! Have you considered opening operating costs as well?

  • ente.com/open is fully automated.

    Publishing operating costs will create operational overhead, since we've to manually consolidate, label and publish expense records. Not excited about doing that right now, but would like to in the future.

    Currently we've runway for a few years, and a margin of ~70% – entirety of which is reinvested into building Ente.

    • If your margins are about 70%, do you have any plans to reduce your prices? Compared to other photo storage platforms, your pricing seems a lot higher. End to end encryption seems to be the only USP when a person looks at your hosted offering.

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What I don't get about Ente is their E2E promise.

When you share albums with someone else, the key is passed in the URL. Nothing prevents Ente from grabbing the key and decrypting all the data at this point.

So it's basically "E2E, trust me bro".

Or am I missing something?

This is cool, I was looking into Ente to supplement Google Photos (I got 6k of my kid's photos, my Google account is associated with too many things and I worry about losing access).

$1M ARR seems low though.