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Comment by cperciva | Hacker News Reader

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 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".

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Then lower the cap. Or do what Mozy does, and charge $5/mo + $1/mo/g (they charge 0.50/mo/gig, but with no Tarsnap sauce).

If Mozy can charge 0.50/mo/gig, 0.30/mo/gig is way too cheap.

I think a big part of the reason underlying why I can't afford it is that it uses amazon for the storage, and that is already quite a fee for large amounts of data even before the tarsnap markup.

The security is of lesser consideration for me, the convenience was the main selling point.

Congratulations, Colin. Your pricing model has people thinking about your service in terms of "a markup over Amazon S3". =)

Personally I think of it as a value added markup as a good thing.

Using S3 would cost me more per month unless I implemented a similar system to tarsnap.

Seeing how Amazon's whole business model is basically to commoditize storage (and cycles and database queries) and drive prices as low as possible, their price per gigabyte seems like a very dangerous star for Colin to hitch his wagon to.

I'm sure you think me crazy, but that's what I was aiming for. I want people to be able to say, like _delirium and wwortiz did, "this is clearly a reasonable price because he's using S3 for backing storage and we know how much S3 costs".

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.

Exactly what does your cost of storage have to do with the value of the service you provide?

It doesn't. But people aren't rational -- they'll reject a good deal (including free money!) if they think the person offering the deal is making out better than they are.

I think you guys are just looking at value differently.

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

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