8 ms·

We have no clue what his costs are. For all we know he loses money each month. There's no faster way to get me to stop listening than to tell me your revenues a

by kolbe 7y ago

We have no clue what his costs are. For all we know he loses money each month. There's no faster way to get me to stop listening than to tell me your revenues and omit your costs.

pinky1417 7y ago
You're right to be skeptical when costs are omitted. Skepticism is especially warranted when you're looking at a standalone company. However, cost estimation can be a bit of a dark art, especially for side projects. Sure, the article would be better if we at least got the readily available vendor cost information: hosting, contractors, etc. That still wouldn't tell us everything though: cost of the owner's time, cost of failed prior projects, etc. In short, generating a total cost estimate involves multiple choice variables. At any rate, do you believe his recurring costs, however you quantify them, are likely to be anywhere near $20k a month? It seems very likely that this is a profitable venture.
busterbenson 7y ago
This is a great point. I’m the creator of 750words.com and am happy to provide loose estimation of costs if it’s useful. It’ll take me some time to put together, and I’m not at my computer, but I can share high-level numbers in a bit if it’s of interest.
- blorenz 7y ago
  Thank you! I, for one, would be keenly interested in this. I think it would enlighten about the operating costs and expenditures that are associated with this service and where they go. I'm hoping that the scrutiny of this might serve you well and you are able to get some takeaways to increase your profits. I appreciate your candidness and willing to be transparent to those ( at the head of the line, myself ) who you owe absolutely nothing to and possess zero vested interest.
  - busterbenson 7y ago
    Okay, I looked over our financial statement from 2018, summed a few things up that would be way too boring to provide in detail, and turned the numbers into percentages so that you don't have to do all the math in your head. Here's what I have: 2018 costs: 48% to salaries and contractors (my wife and I are the only people on payroll, and draw $60k salaries for ourselves) 12.1% to operations (health insurance, renting a desk at WeWork, minimal travel, lot of SaaS subscriptions, misc equipment and other costs) 7.5% to PayPal fees (I really need to renegotiate this) 4.9% to AWS 4.2% to payroll taxes and other business administration 23% to profit (goes to saving up to quit my job last year, finish my book, and then dedicate ourselves to this full time) Hope that's useful! Let me know if you have any other questions about this stuff and I'll do my best to be as transparent as I can without revealing every little detail. Update: I should also mention that the salary we draw is in now way sufficient to actually support a family of 4 in Berkeley, so since quitting my tech job last October, we've been draining our savings and preparing to find a way to turn this little business into something that could sustain us longer term. I call it our flying rickshaw (the opposite of a rocketship). Outcome still uncertain.
    - blorenz 7y ago
      I see that you have 4220 members that are subscription holders. I'm supposing that you have more that are active users but not Member/Patron status. What's average sessions? Is there anything you can do with the AWS allocation (ie. AWS configurations or infra swapping)? From my vantage point of what I perceives as your Service model, I'm not readily seeing any component of it that would be CPU intensive, but I'm just another guy on the Internet. I'm happy to continue my prodding in an another channel. And yes, PayPal fees are taking money from your children.
      - busterbenson 7y ago
        I get about 30-40K unique sessions per month, so a little over 10% are paying users. We gave all accounts that signed up prior to going paid free lifetime accounts, and many of them still use the site... so it's a weird mix. There's definitely stuff I can do to make AWS cheaper. Starting with just remembering to pre-pay for my instances ahead of time. One of my least favorite things to do is to log into the AWS console, so I try to do it as little as possible. The CPU intensive part is due to autosave. When a lot of people are writing concurrently (even on the order of hundreds), that was usually what would take down the site in the old days. The site is weird in the sense that there are 10x more writes than reads, and then doing all of the linguistic analysis, badge granting, stats generating cause spikes when they happen as well. I'm @buster on Twitter if you want to continue the discussion there.

by kolbe 7y ago

We have no clue what his costs are. For all we know he loses money each month. There's no faster way to get me to stop listening than to tell me your revenues and omit your costs.

pinky1417 7y ago

You're right to be skeptical when costs are omitted. Skepticism is especially warranted when you're looking at a standalone company. However, cost estimation can be a bit of a dark art, especially for side projects. Sure, the article would be better if we at least got the readily available vendor cost information: hosting, contractors, etc. That still wouldn't tell us everything though: cost of the owner's time, cost of failed prior projects, etc. In short, generating a total cost estimate involves multiple choice variables. At any rate, do you believe his recurring costs, however you quantify them, are likely to be anywhere near $20k a month? It seems very likely that this is a profitable venture.

busterbenson 7y ago

This is a great point. I’m the creator of 750words.com and am happy to provide loose estimation of costs if it’s useful. It’ll take me some time to put together, and I’m not at my computer, but I can share high-level numbers in a bit if it’s of interest.

blorenz 7y ago
Thank you! I, for one, would be keenly interested in this. I think it would enlighten about the operating costs and expenditures that are associated with this service and where they go. I'm hoping that the scrutiny of this might serve you well and you are able to get some takeaways to increase your profits. I appreciate your candidness and willing to be transparent to those ( at the head of the line, myself ) who you owe absolutely nothing to and possess zero vested interest.
- busterbenson 7y ago
  Okay, I looked over our financial statement from 2018, summed a few things up that would be way too boring to provide in detail, and turned the numbers into percentages so that you don't have to do all the math in your head. Here's what I have: 2018 costs: 48% to salaries and contractors (my wife and I are the only people on payroll, and draw $60k salaries for ourselves) 12.1% to operations (health insurance, renting a desk at WeWork, minimal travel, lot of SaaS subscriptions, misc equipment and other costs) 7.5% to PayPal fees (I really need to renegotiate this) 4.9% to AWS 4.2% to payroll taxes and other business administration 23% to profit (goes to saving up to quit my job last year, finish my book, and then dedicate ourselves to this full time) Hope that's useful! Let me know if you have any other questions about this stuff and I'll do my best to be as transparent as I can without revealing every little detail. Update: I should also mention that the salary we draw is in now way sufficient to actually support a family of 4 in Berkeley, so since quitting my tech job last October, we've been draining our savings and preparing to find a way to turn this little business into something that could sustain us longer term. I call it our flying rickshaw (the opposite of a rocketship). Outcome still uncertain.
  - blorenz 7y ago
    I see that you have 4220 members that are subscription holders. I'm supposing that you have more that are active users but not Member/Patron status. What's average sessions? Is there anything you can do with the AWS allocation (ie. AWS configurations or infra swapping)? From my vantage point of what I perceives as your Service model, I'm not readily seeing any component of it that would be CPU intensive, but I'm just another guy on the Internet. I'm happy to continue my prodding in an another channel. And yes, PayPal fees are taking money from your children.
    - busterbenson 7y ago
      I get about 30-40K unique sessions per month, so a little over 10% are paying users. We gave all accounts that signed up prior to going paid free lifetime accounts, and many of them still use the site... so it's a weird mix. There's definitely stuff I can do to make AWS cheaper. Starting with just remembering to pre-pay for my instances ahead of time. One of my least favorite things to do is to log into the AWS console, so I try to do it as little as possible. The CPU intensive part is due to autosave. When a lot of people are writing concurrently (even on the order of hundreds), that was usually what would take down the site in the old days. The site is weird in the sense that there are 10x more writes than reads, and then doing all of the linguistic analysis, badge granting, stats generating cause spikes when they happen as well. I'm @buster on Twitter if you want to continue the discussion there.