Unearned revenue is a very interesting bit of data, I'm all for transparency and all that but you may actually be giving people ideas here. It's a great source of income because essentially you can play 'bank' without any of the penalties, if you can park 6 months of turnover in an interest bearing account you could add 2 to 3% or so to your bottom line.
As for other interesting statistics, one of the more important one is life cycle, how long on average does an account live. If you multiply your number of signups in a given month with the lifecycle you can figure out an upper limit to how far your business will grow organically (without additional promotional activities).
Have you seen the interest rates banks are paying these days? Interest on unearned revenue is non-zero, but not by far.
As for other interesting statistics, one of the more important one is life cycle, how long on average does an account live.
I can't give you any accurate statistics on that, for two reasons: First, the number of tarsnap accounts which have ever closed is too small to be statistically significant; and second, because tarsnap doesn't have any fixed monthly fees, people can leave their accounts inactive forever and never have them die.
Sadly, he'd either have to take on currency risk (if his assets are in Euros and his liabilities are in Loonies, and the Euro drops relative to the Loonie, he's lost money that wasn't his). Or he'll have to hedge -- but there probably isn't an arbitrage opportunity there.
Tarsnap's unearned revenue is in USD, not CAD -- but aside from that, you're exactly right. I can't earn more interest without accepting currency exchange risk.
And he can't put it into CDs because of liquidity risk.
PayPal's first business plan was to make money on the float. That didn't work, so they started charging (ever higher) fees. In the history of the world, I don't think anyone's ever made their money on the float.
A more useful comparison would be to Jeff Bezos: Even disregarding unearned income, tarsnap produces roughly 1.5 months of float due to AWS billing a credit card at the end of each month (0.5 months after usage, on average) which has a billing period ending 3 weeks later (0.75 months) and which has a long enough grace period that I can wait another week (0.25 months) before paying off the credit card bill.
This "negative working capital" model is one of the reasons Amazon could grow so quickly in the early years -- and makes it very unlikely that I will ever need to raise capital to fund tarsnap's growth.
Unearned revenue seems like a very dangerous thing for a most startups to have.
It makes accounting more difficult, and unless you are careful not to spend it, you risk a 'run on the bank' if a large group of your customers demand refunds.
And unlike a bank, there is probably no insurance for the customers' "deposits". Also, if you need to raise your prices, do you allow people who already deposited money to have access to the old prices as they might expect?
But it sounds like Tarsnap has addressed these issues carefully, and the transparency is a great thing.
you risk a 'run on the bank' if a large group of your customers demand refunds.
Most startups deal with this by putting a ginormous WE DO NOT OFFER REFUNDS FOR ANY CIRCUMSTANCES disclaimer on it. Personally I always hated that so I offer refunds for any circumstances. Since only about 2.6% or so of customers ask for them, I don't need much of a cash cushion at all.
Personally I always hated that so I offer refunds for any circumstances.
Me too -- tarsnap close their accounts and get a refund whenever they like. Not many do; but in the rare case that someone decides to stop using tarsnap, I'd rather refund their money than feel bad about keeping it.
I'm not sure if you'd be willing to divulge this information, but just out of pure curiosity I'd be interested in knowing what types of files people are backing up. For instance, across the whole service, what are the top 10 file types that are backed up?
As for other interesting statistics, one of the more important one is life cycle, how long on average does an account live. If you multiply your number of signups in a given month with the lifecycle you can figure out an upper limit to how far your business will grow organically (without additional promotional activities).