The Price of Digital Sovereignty

I create a service in Europe and one of my principles is to try as much as possible to build it on a 100% European stack, or at least non-US. My servers run on Hetzner, my CDN is Bunny.net, I use Scaleway for several services, Hostinger for part of DNS… On paper, it's coherent.

In reality, it's a bit more complicated.

The Compromises

Sometimes there are services that I'm so used to using that I've forgotten they were US, I'm thinking of Sentry for example. It's a service I've been using for at least a decade and I really struggle to do without it. The worst part is that if I find an equivalent service, it's rather simple to get out of it but since it costs me 0 euros today, I tell myself it's not really an urgency either, I'm not funding a US product for now.

I gladly accept suggestions ;)

(EDIT I’m currently testing BugSink)

Critical Dependencies

Then there are critical services, open source, but very much US, I'm thinking of Let's Encrypt. One could tell me it's just plumbing, it's open source, we don't care etc… In reality, Let's Encrypt banned its use in Iran and Russia as well. This is part of the basic building blocks we should have in Europe to remain sovereign.

Among other critical services, there's payment. I use Stripe, and even though there's an official branch in Europe it remains a US product. There isn't currently an equivalent of this quality but we're starting to see some rather interesting products emerging, I'm thinking of Creem.io, Paddle, or Mollie. There are always little features here and there that prevent me from really making the switch but the alternatives are now serious enough to be usable in many cases.

But as of yesterday I'm facing a new obstacle, emails.

The Email Problem

Sending emails isn't as simple as it seems. So first, a quick vocabulary point, we're going to distinguish:

• transactional emails (password reset, address verification etc…).
• marketing emails, sent in bulk to multiple recipients (for example a newsletter)

Now that we know the difference, we need to understand that some operators refuse to send marketing emails for many reasons (desire to preserve their IP reputation to avoid being blacklisted, and to limit their exposure to certain legal risks related to how marketing emails are sent).

Unfortunately, Writizzy is a service that can be compared to Beehiiv and Substack. I send newsletters.

If I originally chose Scaleway, it was for two reasons:

• It's in Europe
• The cost per thousand emails (CPM) is 0.25 euros.

The Economic Wall

And that's where everything gets complicated.

CPM is the lifeblood. At this level, a few dozen cents difference completely changes the product's economics. All other competitors in Europe are between 0.4 and 1 euro in CPM. Between 2 and 4 times more expensive than Scaleway.

At that price, it's impossible to be profitable against my competitors. I can't sell a competitive offer with a CPM above 0.25 if I choose a European solution.

At this point, three choices are available to me:

• Build my own operator.

I can use an open source product (postalserver or hyvor relay), build what's missing on top and become an email operator myself. It's a titanic undertaking (really…)

• Switch to an American provider.

There are solutions at 0.10 CPM, up to 10x cheaper than some EU products !!

• Give up offering a competitive service.

In the long term, the 1st option seems most sensible to me. But in the short term, I already have customers, and economic necessity will take over.

Do we really want that to be the price of sovereignty? Being less competitive internationally?

And So?

It pisses me off to have to choose between my values and economic viability.

If I wrote this article, it's not to say it's impossible to build a European SaaS. On the contrary, I think it's increasingly realistic. The problem is no longer really finding alternatives. They now exist in many domains.

But they need to be competitive, especially on certain critical services where margins are extremely tight. Don't tell me we can't do it cheaper than a US service. I know the reality of US companies, salaries are higher, their marketing costs are higher, there's nothing that justifies us being between 4 and 10x more expensive. And it's not a scale issue either, by selling more expensive than the market, it's normal not to have more customers.

I will continue to favor European solutions whenever possible. Not because they're European, but because I want them to become the best one day.

In the meantime, some decisions will be dictated by economics rather than my convictions.

And we also need to speak up when something blocks us. Not to complain, but to show where opportunities remain. And there are some.