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hermes-brain/projects/passepartout/strategy/hosting-economics.org
2026-06-01 03:03:11 +00:00

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Pass as a Service — Hosting Economics

Assumptions

  • Stage 2 instance: one SBCL Lisp process with Gate + PDS + environment in one address space
  • User brings own LLM API key — no AI token cost to the provider
  • Containerized: Docker image running on cloud VMs (AWS spot instances)
  • Instances are embarrassingly parallel — no cross-instance coordination

Unit cost per idle instance

At rest: ~500 MB-1 GB RAM. Active peaks at 2-3 GB. CPU at rest negligible.

Packing density

AWS r6a instances (AMD, good price-to-RAM):

  • r6a.4xlarge (128 GB RAM): ~$0.23/hr spot, ~80 instances per VM
  • r6a.8xlarge (256 GB RAM): ~$0.45/hr spot, ~160 instances per VM

Cost per user per month at ~80 instances per 128 GB VM: ~$1.50 for compute.

Infrastructure cost breakdown (100K users)

Component Detail $/user/month
Compute r6a spot, 80 instances/VM ~$1.50
Storage 10 GB EBS gp3 per user ~$0.80
Egress Light protocol usage ~$0.50
Relay K8s, stateless web service ~$0.50
Infra subtotal ~$3.30
Overhead
Engineering 4-5 people ~$0.80-1.60
Support 2-3 people ~$0.40-0.80
Overhead subtotal ~$1.20-2.40
Total ~$4.50-5.70

Pricing and margin

At $10/user/month:

  • Cost: ~$4.50-5.70/user/month
  • Margin: 43-55%

Scaling inflection points

Users Provider cost/user/mo Margin at $10/mo
1K $25-40+ Negative
10K $8-12 ~0-20%
50K $5-7 ~30-50%
100K $4.50-5.70 ~43-55%
1M $2-4 ~60-80%

10K-20K users is the crossover to positive unit economics. Below that, the team overhead dominates.

Cloud vs colo

At small scale (under 10K users): AWS wins. No hardware risk, no colo contract, elastic.

At large scale (100K+ users): Colo is 2-5x cheaper per instance. AWS premium comes from degraded packing density (hypervisor overhead, can't overcommit memory).

Crossover at roughly 50K-100K users where dedicated ops justify colo.

Architecture

Relay on Kubernetes (stateless web service, standard pattern). Instances are Docker containers on raw VMs — one container = one SBCL Lisp process + volume mount for PDS. No orchestration magic needed for the instance layer.

The hardest operational problems: port mapping at scale (reverse proxy in front of VM pools) and PDS data persistence on VM failure (EBS snapshots or NFS-backed volumes).

Why this works

Three things make the unit economics viable early:

  1. Zero AI token cost (user brings own API key)
  2. The Gate runs even without an LLM — caches common decisions, declines to reason when no key is configured. Not a degraded product, just a non-AI mode.
  3. Docker-on-large-VM packing recovers bare-metal packing density on cloud, avoiding per-instance overhead.

Addressable market

AI chat vs AI agents — orders of magnitude gap:

Category Users (Jun 2026) Notes
ChatGPT (chatbot) 900M weekly active Mostly text generation
AI agent users (all tools) 5-10M Actions, tools, environment control
Ratio ~100:1 Not 1000:1 as of mid-2026

Agent users are 1% of chatbot users today. If agent adoption follows the same growth curve as chatbots but lags by 18-24 months:

Year Est. agent users 0.1% capture = users MRR at $10/mo Annual rev at 50% margin
2026 5-10M 5K-10K $50K-100K $300K-600K
2027 50-100M 50K-100K $500K-1M $3M-6M
2028 300-500M 300K-500K $3M-5M $18M-30M

This is conservative — 0.1% capture of the agent market, $10/month (no AI tokens included).

Passepartout is not just an AI agent. It's a social protocol, verified computing environment, and knowledge system. It competes on more than agent UX. Even a fraction of the growing agent market funds the infrastructure.

Price ladder

The most important constraint: the price users will bear must cover real infrastructure cost at whatever scale you're at. Two tiers solve for both growth and unit economics.

Self-hosted tier (growth engine):

  • User downloads the image, runs on own hardware or $5-10/mo VPS
  • Brings own API key for LLM access
  • Provider cost: ~$0.50-1/user/month (relay + routing)
  • Zero per-user compute or storage cost to provider
  • Negative margin but negligible — scales to millions freely
  • This is the wedge: proves the protocol, builds the network, costs nothing to operate per user

Hosted tier (revenue engine):

  • Provider-managed container, user brings API key
  • Packing density drives cost:

    • At small scale (<5K hosted users): cost = $20-25/user/month
    • At mature scale (50K+): cost = $5-7/user/month
Phase Scale Hosted cost/mo Charged price Margin
Bootstrap <5K $20-25 $25-30 10-20%
Break-even 5-20K $10-15 $20-25 40-50%
Mature 50K+ $5-7 $15-20 60-70%
Commodity 500K+ $2-4 $10-15 75-85%

Pricing strategy:

  • Never price below cost — ramp pricing down as infrastructure efficiency improves
  • First 5K hosted users are enthusiasts and early adopters who pay a premium ($25-30)
  • When costs drop below $10/user/month, you have room to price at $10-15 and open a much wider funnel
  • Self-hosted grows the network regardless of whether the hosted tier succeeds

What the price buys:

  • Persistent Passepartout environment (shell, editor, browser, agent in one image)
  • Social protocol identity (DID, PDS, encrypted messaging)
  • The Gate verifying every action
  • Org data you own, in a format you own
  • AI tokens are NOT included — user brings own API key

Buyer profile:

  • Already spends $10-200/month on LLM API keys
  • Values a verified, persistent environment over ephemeral chatbot sessions
  • Wants to own data and identity
  • Can't or won't self-host
  • Developer, researcher, or knowledge worker

The non-obvious constraint: The addressable market at $25-30/month is narrower (0.1-0.5% of agent users) than at $10-15/month (1-5%). The hockey stick in user growth depends on infrastructure costs dropping far enough to price at consumer-friendly levels without burning capital.