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Ask HN: What pricing model works for high COGs side project?

Article news.ycombinator.com

Ask HN: What pricing model works for high COGs side project?

So I've been working on this app that's a dashboard + taskbar widget for commute times. I made it for myself so I wouldnt have to search for it all the time by googling it. I was honestly surprised it didnt really exist but the reason is now obvious to me. It's because live traffic data is super expensive. Around $2.50 / 1k calls from my provider.

So each round trip route would cost around $4/month (2 calls per route * one call per hour * 24 hours * 30 days) This is quite a lot imo in raw costs, which doesn't even factor in my cut. I think in this day and age with so many free apis, your average person (myself included) would not think a simple traffic widget would cost ANYWHERE near that amount. On top of that, of course I wanted the udpate frequency configurable. Maybe some people want to have it update every 15 minutes. Unfortunately now we are generating x4 in costs. Factor in each user can add N routes, somebody could have 5 routes and now they're suddenly incuring $80! in spend. Which I'm sure _very_ few people would be willing to spend.

I originally thought I would just charge for usage so that the user would have incentives to tune down their usage. AKA I could put in an active hours feature so that they could put in only hours of their commute.

But then every single piece of pricing advice says to NOT taxi meter the users. And to be fair, despite the similar high cost nature of AI services, almost none of them at the consumer facing front charge per usage. They use the bucket of tokens method + overages. But honestly I think this is only viable for them because they are massivley subsidizing their users with VC money. If I remember correctly, the $20 plan many of them have would have to cost around $150 to break even.

I think it's the nature of these 2 levers of route count + frequency, which can generate such wildly amoutns of cost that makes it hard for me to imagine a world of a flat subscription plans.

Looking at other busiensses with comparable price dynamics, I found what I'm calling the "home security camera" model, where they charge a flat rate and +X per camera. Recently a large camera company moved to this because their flat annual subscription just wasnt working. IE charging the same for a user with 1 camera vs 10, and having to store 1080p vs 4k footage

What would you do in this situation? Sincerely confused

Discussion 0 comments · 1 points · onemiketwelve · 2026-04-16
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