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Comment by c1c2c3 | Hacker News Reader

You pay $10 per Gb but this is a one off payment rather than annual. The money is supposed to go into an endowment that will pay for the storage costs long term.

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Aren't one-off payments to cover running costs provably unsustainable? It relies on continuous growth to support old users. I personally would want to rely on a service that might close at any minute because it stopped growing.

Not if you are able to charge enough, and reinvest the funds such that low-risk investment returns will cover the cost.

Combine that with underlying costs (storage, data transfer, computing power) which are trending downward and there’s no reason it shouldn’t work.

The idea is that they'd form an endowment. So they put your $10 in some sort of relatively safe investment, and every year it grows by, say, 1%. So then they have 10¢/year/GB to spend on storage costs.

At 10$/gb they are charging 200 times what you pay for a gb elsewhere for a month. So they are at least getting 200 months worth of money from you upfront. Even aside from what the others mentioned with the endowment.

Money makes money.

Say they raise enough to earn interest on their capital.

Say they make 1% interest per year.

Storing a GB costs $10. 1% of that is 10c.

How much does it cost to store a GB for a year?

Amazon charge ~1c/m for infrequent access and 0.4c/m for Glacier.

So somewhere between 12c and 5c a year.

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