For something you want, maybe. But a lot of these services fall into the category of "I might find it useful sometimes but I'm not sure" and most people aren't going to spend $15/month on something they're not sure they want.
The average Tarsnap revenue per user is about $3/month, and a large majority are less than that (yay lognormal distributions!) but I still work to convince people that it's worth spending that money.
You think this is a good thing, but it's not. Instead of setting a simple price based on what Tarsnap is worth to people --- a task that requires figuring out what Tarsnap is worth to different people and selecting the segment of the market that(a) you want to serve and (b) is sufficiently lucrative --- you have a fundamentally cost-based micro-metering structure that almost certainly radically undercharges most of your users.
You may think you're doing your users a favor by letting them off easy. But you're not. If Tarsnap is worth $11/mo to most of your users (hint: it is) and you charge $10/mo, you're generating value for them. But instead of doing that, you charge them almost nothing, and as a result are much more limited in what you can do for them. Last I checked, you were consulting instead of full-timing Tarsnap.
If you charged more, you could afford to:
* Radically overhaul your website and educate users about what secure backup actually means
* Commission a better user interface for people who you'd like to offer secure backup to but can't because they're not going to use a Unix command-line tool
* Implement more and better features on the backend of your system for tracking data, scheduling backups, backing up different kinds of data, and whatnot
This is all apart from the obvious point that your micro-metered pricing scheme is a Mensa test that almost makes fun of people's attempts to figure out what your service costs. Yes, the fact that it costs much too little means the joke is on you, but that doesn't really take the sting out of it for your prospective customers.
Just to set the record straight on one point, though:
Last I checked, you were consulting instead of full-timing Tarsnap.
Yes, I do consulting, but it's a very small fraction of my time. And honestly, I think what I learn from the consulting is worth far more than the money I get.
It is, as Patrick will testify after many an evening conversation in Chicago, "all love" with you & me & these critiques. Your project should be epic by now, and it's driving me a little crazy.
Here is a hint, Colin: any time a prospect says he's "run the numbers" on your pricing, you just received a strong signal that you need to simplify pricing. Purchasing decisions should be made in the limbic system.
Think about it: if you charged $5/mo and put an obscenely high cap on storage for the $5/mo account, then by your own math you'd be hugely improving your revenue, and at the same time you'd be charging half of this original poster's pain threshold number --- which is referring not to crazy encrypted backup solutions but to things like to-do lists!
At EnterAct, the ISP I ran tech-ops for, my old boss Mike Cloran came up with what he called the "5/30" pricing scheme, which we used to great effect to grab customers from other ISPs. Other ISPs were either metered (which scared the shit out subscribers) or flat-rate (which chased away light-users). The 5/30 plan was: $5/mo + $1/hour, capped at $30.
This is actually not a great deal and it is not particularly sophisticated (it is... wait for it... a capped metered plan). But it simplified the buying decision for people, addressed their perceived risks, and made EnterAct seem even more flexible than it already was.
Pricing is the hardest part of product marketing. There's a reason why established companies don't let just anyone do it. Your pricing scheme punts on it.
... and also hugely increasing my costs. With all due respect, I've talked to a lot more Tarsnap users than you have, Thomas, and I also have the advantage of seeing how much data people upload and how much they delete.
Your suggested pricing model would result in people uploading far more data and never deleting any of it, and would very rapidly move Tarsnap from "profitable" to "bankrupt".
If Mozy can charge 0.50/mo/gig, 0.30/mo/gig is way too cheap.
The security is of lesser consideration for me, the convenience was the main selling point.
Using S3 would cost me more per month unless I implemented a similar system to tarsnap.
A critical part of trust is transparency, and in the long term I think I'll do better by having transparent and obviously reasonable pricing than by obscuring things and trying to maximize my (short-term) profits.
I didn't know about either of your companies but by the discussion, its clearly possible for Tarsnap users to derive value from the trust associated with transparency and feeling like their dollar is maximized. tptacek, pricing schemes aren't the only component of the purchase decision or profitability. His users are making a more emotional decision. cperciva should stick to the core of what his users are finding valuable...then get bought out and turn into an evil profit maximizing company
It is like the Iron Mountain of backup solutions.
* you have to find out what the value your service generates is to different groups of customers (an MBA would call them "segments").
* you have to figure out the cost of acquiring and maintaining customers in each segment.
* you price based on the value (if it creates $10/mo apparent value, that's the number with a gravitational pull).
* bust out cleverness to figure out ways to capture money from high-value low-volume segments without scaring away low-value high-volume segments.
I'm close enough to Colin's target market to know that "just stick the server's filesystem in tarsnap and don't even bother taking an inventory of what's on the machine" is worth multiples of S3+80% just in recovered admin productivity.
One example, which I use for hosting, is nearlyfreespeech.net. Amazon's and Google's cloud services have a similar utility-pricing model, though I'm not sure how much I personally trust them to price in line with costs, especially whether they're going to pass on future cost decreases. Prgmr.com is a flat fee rather than a combination of micro-prices, but it has a little of the same vibe of, "I calculated how much it should cost to operate these servers, divided by the number of VPSs, added on a reasonable profit margin, and that's what I'm charging", which is one reason I went with them.
It's not even necessarily the overall price that worries me so much as liking the general warm-and-fuzzy feeling that I'm not getting a hugely marked up service. Same as when shopping for, say, a mechanic: I feel most comfortable with a mechanic I can trust to charge me what the repair costs, plus a reasonable profit, not one who's trying to size me up to figure out how much the repair is "worth to me".
Not specific to cperciva: If you have customers who value your service less than a cup of coffee, fire them. If this leaves you with no customers, consider a new app or marketing strategy.
Vancouver, Canada. (Well, Burnaby technically, but close enough.)
I want to get a coffee some time [...]
Sure! Let me know if/when you're ever in Vancouver.
If you have customers who value your service less than a cup of coffee, fire them.
I disagree. The money I get from Tarsnap's $0.01/month users is insignificant, obviously -- but they're worth many $/month for their willingness to proselytize. The utility pricing model is like the freemium model, except it weeds out the people who aren't willing to pay anything at all.
And those with just too much data and too little budget :)
Check out what tarsnap does so you can compare tarsnap with a tapedrive.
This (S3's storing everything so redundantly) is what I see as the main benefit that tarsnap would get you, since the encryption itself is the easy part---just GPG your dump before writing to tape.
Now, I might be strawmanning you. What does tarsnap get you in particular that tapes do not?
When I saw the pico-dollars bit on the site I instantly knew this was not someone I wanted to do business with. The sort of person who tries to prove his intelligence constantly rarely has the ability to cut through the fat to get into the meat of the matter. They'll play in the weeds all day long, but never climb the mountain for a good view.
I agree with Patio11, buck up grow a pair and charge good money. It looks like you've got solid infrastructure, it just needs to be charged for and sold.
Seriously, switch to $/Gig, and sell the hell out of it. I don't care how smart you are. Show me how you can make my life better/simpler then get the hell out of it.
1. True story. I've gained a good nose for these people and I just walk away after the first encounter.
The word "picodollar" is basically a dollar sign with a <blink> tag around it.
I thought - this guy has DJB sized balls, I really want to use it. portsnap was great, this will be too.
And I don't even have a beard.
Colin has a platinum backed BSD pedigree. Tarsnap appears to be aiming at BSD minded users in the first instance ie people who mostly know what they are doing. Colin's grown tarsnap out of what he knows, the BSD aesthetic. What you know is a really good place to start.
But now, to grow tarnap beyond the BSD commandline pico-niche, something I really hope Colin does, because he's earned the success, it could / should adopt a Jungledisk like model. With an OS X desktop client, clearer pricing, and Apple level UX/marketing. And clients for home storage devices like Qnaps etc. And yes he should charge much more for that. Tarsnap does seem bizarrely, wonderfully cheap. And long may it remain that way... on the commandline.
Tarsnap should white label the service and keep the existing pricing. It will increase their volume drastically and the really low pricing will allow a lot of people to build a very profitable business on top of the service.
Someone then can charge 20$/month and a buck a gig for storage with some flashy mac/iphone/ipad app and kill it.
If you want to build a service on top of Tarsnap, please let me know and I'll do my best to provide you with whatever interfaces you need.
Not listening to your customers will make it rough road for your company. Your customers say don't price in picodollars. Your customers say price flat rate and figure out how much storage you can afford to give them for that rate while still making a healthy margin. You'd do well to listen to them instead of justifying why you should continue to scare potential customers away.