Business Overview - CostPlusDB

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CostPlusDB: Transparent, Affordable, Managed PostgreSQL

Version: 1.0 | Last Updated: October 2025

Executive Summary

CostPlusDB is a managed PostgreSQL database service built on radical transparency. We show customers exactly what we pay for infrastructure and charge cost + 25%. No hidden fees, no surprise bills.

The Problem

Major cloud providers mark up database hosting by 500-2000%:

AWS RDS charges $303/month for $12 of infrastructure (2,425% markup)
Google Cloud SQL charges $403/month for the same (3,258% markup)
Customers can't see the actual costs and have no choice but to pay

Our Solution

Transparent cost-plus pricing:

Show exact infrastructure costs on every invoice
Fixed 25% markup on all variable costs
Customer choice of infrastructure provider
Fixed-price tiers for simplicity ($59, $119, $179, $299/month)

Business Model

Revenue Streams

Base Tiers (Fixed Pricing): $59-299/month with 80-96% margins (high because we're transparent on add-ons)
Infrastructure Upgrades: 25% markup on premium providers (Hetzner, DigitalOcean, AWS)
Enterprise Add-ons: 25% markup on HA, replicas, compliance, VPN
One-time Services: Managed migrations ($500 flat fee)

Target Market

Primary: Bootstrapped startups and indie developers (90% of customers)
Secondary: Small businesses moving off AWS to reduce costs (10%)
Customer Profile: Technical founders, budget-conscious CTOs, long-term thinkers

Competitive Advantage

Transparency: Only managed DB provider showing exact costs
Price: 40-70% cheaper than AWS/Google/Azure
Simplicity: Solo operator, direct support, no corporate bureaucracy
Trust: All SOPs and business docs public on GitHub

Technical Architecture

Infrastructure Stack

Compute: Contabo VPS (default), Hetzner, DigitalOcean, AWS/GCP (optional)
Database: PostgreSQL 16 (latest stable)
Backups: pgBackRest + Wasabi S3 (30-day retention, 7-day PITR)
Monitoring: Betterstack for uptime/performance alerts
Security: UFW firewall, fail2ban, SSH key auth only, TLS/SSL enforced
Connection Pooling: pgBouncer for efficient connection management

Service Levels

Uptime SLA: 99.9% (measured monthly, not 99.999%)
Support SLA: 4-hour response (M-F, 9am-6pm ET), email only
Backup Schedule: Daily automated, tested monthly
Security Patches: Applied within 7 days of release

Growth Plan

Phase 1: Bootstrap (Month 0-12)

Goal: 20-50 customers, $5-15k MRR
Focus: Manual operations, build SOPs, refine pricing
Infrastructure: Rent VPS from Contabo/Hetzner
Profit Use: Save 100% for hardware purchase

Phase 2: Own Hardware (Month 12-18)

Goal: Purchase 2 dedicated servers, colocation in US datacenter
Investment: $8,000 upfront + $200/month colo fees
Benefit: Reduce infrastructure costs 50%, pass savings to customers
Capacity: 50-100 databases on owned hardware

Phase 3: Multi-Region (Month 18-36)

Goal: Add EU or Asia datacenter
Offer: High availability across regions
Pricing: Still 25% markup, just lower base costs

Financial Model

Customer Acquisition

Cost: $0 (no paid ads, organic only)
Channels: Hacker News, Reddit, Twitter, word of mouth
Growth Rate: 5-10 customers/month (slow, sustainable)

Unit Economics (Dedicated Tier Example)

Customer pays:           $119/month
Our costs:
  - Infrastructure:      $10
  - Backup storage:      $1
  - Monitoring:          $1
  - Support (amortized): $5
  - Total:               $17

Gross profit:            $102/month (86% margin)
LTV (24 months):         $2,856
CAC:                     $0
LTV/CAC:                 Infinite

Break-Even Analysis

Fixed Costs: $500/month (tools, domain, LLC, insurance)
Break-Even: 7 customers on Dedicated tier
Sustainability: 20 customers = $1,440/month profit (covers part-time labor)

Competitive Analysis

vs. AWS RDS

Feature	AWS RDS	CostPlusDB
8GB RAM, 200GB	$303/month	$119/month
Pricing transparency	Hidden costs	Show exact costs
Support	Paid ($100+)	Included
Uptime SLA	99.95%	99.9%
Best for	Enterprise	Bootstrappers

vs. Heroku Postgres

Feature	Heroku	CostPlusDB
8GB RAM, 200GB	$250/month	$119/month
Fork/follow	Easy	Manual (future)
Dev friendly	Very	Moderately
Infrastructure choice	None	5 providers

Risk Mitigation

Technical Risks

VPS failure: Mitigation: Daily backups, documented restore procedure, tested monthly
Security breach: Mitigation: SOPs for hardening, automatic security patches, incident response plan
Data loss: Mitigation: Multi-region backup redundancy, 30-day retention, PITR

Business Risks

Low customer volume: Mitigation: Low fixed costs, can run profitably at 20 customers
Support burden: Mitigation: Careful customer selection, 4-hour SLA, email only
Infrastructure cost spikes: Mitigation: 30-day notice policy for price changes, transparent pricing

Customer Selection Criteria

Good Fit

Technical founders who understand PostgreSQL
Budget-conscious, not price-shopping
Value transparency and honesty
Long-term thinkers (2+ year horizon)
Comfortable with email support

Not a Good Fit

Enterprise 99.999% SLA requirements
Need 24/7 phone support
Require hand-holding on PostgreSQL basics
Will churn for $5/month savings
Compliance-heavy (HIPAA/SOC2) until Month 12+

Note: I reserve the right to decline customers to maintain service quality and support SLA.

Long-Term Vision

Build a sustainable, honest database hosting company that:

Operates on owned hardware (not rented VPS)
Employs 1-2 people (not a venture-backed team)
Serves 200-500 customers profitably
Maintains 25% markup forever
Publishes all financials and operations docs publicly
Demonstrates that transparency and profitability can coexist

Questions? Email jeremy@intentsolutions.io