What I Would Do If I Ran Tarsnap

If you run a high margin SaaS business where much of the technology is open source, you are going to get cloned. Once you get cloned, you can be crushed by people much better at marketing and sales.

If you stick to low margin / cost plus pricing, it effectively poisons the well for your competitors.

The "poison the well" strategy has worked very well for Craigslist, and the Siracha hot sauce guy.

I'd do everything patrick suggested, but stick to the cost plus pricing and not worry about extracting consumer surplus for the value you create.

Once you have a $500/month enterprise plan that is popular, you are going to have competitors that offer more for $400/month, and VC's will be plowing them with money to hire salespeople to go after these $40,000 LTV customers. All the sudden, your product will no longer be the best solution for your own customers.

It doesn't poison the well as it stands, because someone could still take the OSS software, add a pretty layer with the business continuity guarantees and a bunch of salespeople, and charge $500/mo, and businesses would go with that one rather than that looks/acts like tarsnap. And that would be a rage inducing tragedy. To avoid that, I really hope Colin takes some/all of this advice.