So to a first approximation you're valuing the business at 0. You're generating enough free cash flow to pay the salary needed to keep it running but no more. If you wanted to delegate that responsibility you, as the owner, couldn't get anything out of the business as the free cash flow would be 0.
Nothing wrong with that really, but if you really want to strictly price it as a utility there needs to be some form of return on equity. Even amazon generates some free cash flow, they've just been reinvesting it all so not generating any income.
He said he's in a good financial situation. He did not say he paid himself the lowest possible amount of salary he could live off, and let the business run without any safety buffer of money.
I'm just going to assume that Colin is smart enough that he knows how to price his service. After all, he's the only one with the data to really know tarsnaps financial situation.
