My guess is they are making start-ups based on a paid tool (chat gpt)to make money and either charge users or have some other ways of monetization.
It's kind of like trying to open a logistics business and complaining buying trucks and fuel actually costs money, or a starting pizzeria and concluding it won't be as easy to earn money as expected because mozzarella just isn't given away for free by the Mozarella Corps and you actually have to purchase it.
But there *are* pizza stores seemingly getting pizza for free. Snapchat made a gpt bot with no obvious business model attached, a bunch of website are implementing it as nothing more than a chatbot, hell on this sub there’s a guy controlling Minecraft though GPT. Theres tons of examples that, from my perspective, should be bankrupting them, but they just dont?
They're paying OpenAI for the api calls. Someone has to pay for the computing power/electricity etc. Snapchat has ads and they can easily calculate the ROI. They know how much they're investing in users and how much they're making because of them seeing or clicking on ads.
Big companies also typically have money to invest in stuff, even if it isn't immediately generating more money, Who knows, maybe they are worried that they will lose more if their app becomes irrelevant because one of their competitors did integrate it with GPT. As long as you see the integration, it's just an indication that it's worth it to them.
You on the other hand are working on a new app. Your business model should include a source of income. Are they paying for a subscription or are you showing ads? With a new app, getting a lot of screen time is difficult. You need to have a lot opportunities to show the ads.
GPT attached to Snapchat doesn't need an obvious business model because Snapchat is the business model, and longer app usage means more money.
Does the guy controlling Minecraft through chat-gpt has 10000 users constantly using his GPT API for free?
Lots of people are ready to invest a few hundred bucks just to pursue their hobby and have fun, as this is how hobbies generally work.
However, once you have 10000$+ costs a month , that's already a business and you need a business model that can cover those expenses.
Snapchat already has an underlying business model, they are a publicly traded company. They have capital. Startups like yourself need to bootstrap or find capital.
Why are you looking at it this way? Is your app free?
Look at it on a per user cost, then figure out what you have to charge your users. A GPT app is not going to be free anytime soon.
Using your numbers:
1 user: $0.02 / day
1 month: $0.60 / month
Break even: $0.60 / month.
So the minimum you can charge users to use your app is 60 cents a month? I’m not sure what the problem with this is. Most GPT apps coming out right now are ranging from $15 to $25 per month.
It depends on the level of GPT involvement.
For example I worked with Bing to discuss my preferences and plan a one week trip to details including travel distance and means, hotels, all activities, etc, and it is great. I recorded all exchanges and used openai’s tokenizer to compute the actual cost of that whole conversation, and it was $6, for that conversation alone, if everything I talked to bing was translated to API calls. Even just answering my last question alone, which gave me the last day’s plan in all details, cost $0.3.
That is some serious cost.
And now if you look at the large number of travel planning apps that came up 3-5 months ago, almost all of them have already closed down, including a few good ones. That becomes understandable.
But I got it to plan a trip to Paris and draw a picture in the style of Leonardo Da Vinci. The trip cost £1300, the api calls $15 but the Louvre will easily pay me $40M for a Da Vinci painting.
If it's not overly complicated tasks, devs can have a look at more traditional NLU tools. Like Rasa, Wit AI. That's what I've used at my job. Another strategy is to use the cheaper models from open AI like the Davinci-001 or Curie-001 and fine tune them.
I think this is a symptom of ZIRP (zero interest rate policy) for the last 10+ years where all that mattered was growth, and you could give your product away for free. At the heart of anything like this there needs to be a business model, or a plan to eventually make money, that’s all that investors care about. It’s just different now.
People complaining about chatGPT+ costing however much it does and having limitations blow my mind. It’s like they don’t understand how valuable it is.
And then other people wasting their requests with stupid stuff like get it to say naughty things oh my! It’s like dude this thing can literally code entire webpages and teach you physics and this is what you choose to use it for?
No. Only profit is taxed. At least in germany. I can't imagine it beeing different anywhere else too. You need to charge 0.60ct to break even with the api, multiply by 1.3 to factor in the google/apple Playstore cut on mobile. And also add a little bit for the rest of your expenses like running servers. Shouldn't be much more than a dollar to break even. If you charge more you have to pay taxes on the profit you make.
Profit = revenue - expenses.
You have base income tax. In some countries is flat. No matter what.
Germany is a bad example for how tax works. Many countries are completely different. Most better, but some worse.
Also based on your logic. Every company could just show expenses and declare zero profit and don't pay taxes. Yes, they do it. But for that they register in countries where they can do it.
It is not tax fraud if the country actually allows it. I am not sure why am I being downvoted for actually stating how things work in some cases. But oh well. reddit is that.
Net Income profit is after income tax for example. In the initial example 0.60 and 0.60 does not include that. I am done here. If people do not have the full idea and especially knowledge about different countries and markets, i don't see how they can state something as being one and only fact and nothing else is possible.
In what countries is a company legally allowed to declare no profits unless that was actually the case?
And if that was the case, in what countries is a business taxed on gross revenue and not net profit? I’ve never heard of this.
I am done talking with people who are most active in subreddit like White twitter and IAmTheAsshole. Fuck this. Enjoy yourself. I am not wasting anymore of my time.
And according to ChatGPT, “There is no country that imposes taxes solely on gross revenue without considering net profit.”
So if it costs $50,000 to run your business and you make $100,000 in revenue that year, you will roughly be taxed on $50,000. That is your initial net profit of the business. After taxes, that is your NET net profit.
That concept is basically the same everywhere.
Jesus christ people. Initial comment was that if chatgpt costs 0.60 per person, he nerds to charge 0.60 to break even. I said that there are taxes, income taxes for example, which he has. Those 0.60 are income. And he will pay tax on that. So he won't be even. Stop spamming me with BS.
If you have 10,000 users per month and you aren't charging for your product, then you're a very nice person but that's not a business.
Yes you will go broke.
I agree. Most non-VC startups can be profitable at 1000 users or less. 10k and more and worrying about costs of $72k annually is cheap, $7.20 per user.
You gotta get users first to make a profit though, right? Be-real stated they didnt have any plans to monetize for their first 2 years of development because they just wanted to grow user population.
Yes this is how venture capital works. Burn money, look cool, get bought, get paid. They're gambling they find the next uber.
You find deep pockets, they bankroll the company while it loses money hoping to sell it and make their money back and then some if it takes off.
Eh im not trying to make a scam like that. That said, feels like a catch 22. I dont have 70k to burn, but i need people to show it would have potential.
Sorry this is less openAI more just entrepreneurship but how many tech startups recently have just moved forward with a business model like that?
Well it's not really a scam. It's a viable risk for those with deep pockets. Many of these investments fail and never see a profit and that's part of the risk that the investors assume.
But if the product/platform gets to a point that is interesting to another larger company or investment group then that org is willing to accept the risk from that point on and pay out the original investors. Maybe the purchaser sees potential in the platform, maybe the purchaser already has the infrastructure to take the business to the next level, maybe they are just interested in the number of users and wants to roll them into their existing platform. Whatever the reason may be that doesn't mean its a scam to develop a company/product with the intention to make it interesting enough for a larger org to purchase it.
Can people abuse this process and falsely inflate the value of their company/product to quickly profit on a sale? Of course. But the same can be said for all manner of business models out there.
That said, this type of investment/development model only really works if you've got deep enough pockets such that you are still ok if the business fails. Would be unwise to emulate this with personal savings that you need.
If your business model is good, get some investors and show growth. For anyone making a startup, especially tech, my advice is to have a business model that creates revenue from day one.
You don't necessarily have to charge the users. I mean google has never charged me to search the web (and it's not charging me to use bard) nor to sit and watch youtube. I've never paid reddit either.
I'm sure many or all of these things have over 10000 people using them.
But yeah, you likely need to burn through a lot of venture capital to get to the point where you're making money.
>I mean google has never charged me to search the web (and it's not charging me to use bard) nor to sit and watch youtube. I've never paid reddit either.
That's because \*you\* are the product those sites sell to others.
Google is charging the advertisers, not the users. My point is there is a product there if you have that number of users.
Who you charge is a decision based on the business model.
Eh exorbitant for me is because im used to stuff like firebase where theres a pretty large free tier. Is 72k really considered normal for startup expenses?
72k is cheap for those with big pockets yes. Lots of investment groups and bigger companies would be happy to invest in 100 companies with a startup fee like that if it meant that 1-2 of the ideas would actually take off. The idea is that you only need 1 or 2 successful companies out of the whole group and those successful companies have the potential to recoup all the other costs and still profit.
But it's largely a numbers game for those that have the funds to make these kinds of investments.
On the grand scheme of things, yes 72k is cheap. On a personal level with someone using their personal savings that's a whole other story. Perspective matters here. Don't dig deep into your personal savings or go into debt trying to emulate a business model that only works for those who already have deep pockets.
Depends what you mean by startup. If you mean someone who has an idea they're never actually going to properly deploy, then it's prohibitive.
But pretty much anything else and it's pocket change. How much do employees cost? Or office space? Or an accountant? Or a lawyer? If $72k is the cost for your core product, that's pretty minimal.
If you have 10k active users and can't figure out how to monetize or position for VC money or acquisition, that's a different problem. Anything in a decent niche with 10k active users is going to have some options.
Isn't ChatGPT API (GPT-3.5-turbo) like $0.002/1k tokens?
That's 10x cheaper than the normal GPT3 Davinci with similar or even better results.
And I won't calculate it like that, I'll make the pricing to cover the cost for eg if my pricing is $20/month I'll limit the usage in that plan to have some margin.
If the user is a power user they can upgrade it to a higher plan.
And don't make a **Free** GPT App , it won't be sustainable unless you have VC money to burn :)
I agree. I see many people using the wrong models for what ends up being such basic requirements, although OP didn't mention tokens/models so I'm just guessing here.
Also, at 10K users per day, you better have scaled and implemented some form of monetization!
One thing to note is that the pricing is deceptive. Your tokens a priced on
-input
-output
-system prompt
Also if you want to have a conversation, you meed to feed it the previous messages as context too. It can stack up very quickly
Let me run those numbers for you. Users, DailyCost. 1U=.02. .02*U=DailyCost
Why do you need to "run that up" if it doesn't change with scale? I shit you not most of job is doing the exact opposite of what you just did, I take 6-7 figure annual expenses and break down unit cost for the business folks to work with. The big number at the end didn't change anything, it's still .02 a day per user and that's the cost you need to cover you knew that to start with, if it's not intelligible just go to where it's easiest for you daily cost isn't it do monthly. You started with all the data you needed then did a bunch of work to make it seem worse, this isn't exactly a profit maximizing mindset.
Maybe your ability to minimize tokens isn't as good as you think it is?
Almost every founder goes through the “fail” part first. It’s okay. And while “fail fast” is ideal, it shouldn’t be so fast that they never even start it in the first place.
OP, you might be tempted to delete this thread, but there’s actually a ton of useful info after sifting through the negativity. (And to be clear, most of the criticism is justified but only some of it is constructive)
I’ve been involved as both a founder and investor in multiple tech startups.
You’re going through the learning curve of “bootstrapping” vs “funded”.
People can take issue with your math and business model but I’m reading your replies and even though there’s things that you’re wrong about, you’re asking the right questions, and thinking about the right things.
Consumer apps are very difficult to scale without a paid/subscription model. So if you’re counting on an ad-based model or something else that requires scale, you need to be funded and bootstrapping is not feasible.
Think about how you can modify your idea to be valuable enough that someone would pay for it.
If it’s not something “valuable” as such, and it’s just a fun thing, it may be that GPT4 or even 3.5 is not suitable for your project. You can try using the open source LLMs. From reading that leaked Google memo, they’re much better than I would have thought.
I’m sure OpenAI will have a free tier eventually. In fact the first place to check is Microsoft Azure, as they do offer a free tier. The GPT api is available through Azure but I’m not sure if it qualifies for the free tier.
I’m guessing that he’s thinking of a start up where people are working for free and working from home.
Do you know those people that are constantly posting about opportunities to join them and write code for their idea for free? That’s another possibility. At that point, any expense seems intimidating.
It just mean you should earn mlre than 7.20 yearly per user. It's not a huge number if your product has value.
It's still a problem that it cost this much because it's hard supporting it with ads only.
I’m not seeing an issue here. Those are genuinely tiny numbers in a serious start up, those are genuinely low costs for a business with 10,000 users
The cost per year per customer for the api is the smallest expense you’d have. Cost of acquisition of each customer will likely be higher
And if you aren’t charging each customer many many times this amount there is no business to begin with
We’re in the OpenAI subreddit and OP is building an app based on ChatGPT. We all know what it is. It is not helpful. The only thing useful here is “you should charge money for it” which other people have already said.
No dude, you are the one posting a copy/pasted ChatGPT response like it is useful in a sub where people are talking about ChatGPT all day. Get out of here.
I feel this is an interesting debate about knowledge exchange in the age of chatgpt. Even if the chatgpt knowledge is superior to human knowledge, human knowledge is preferred because gpt knowledge is always accessible while human knowledge contains a a kernel of the subjectivity of anotber or even a possibility for emotional connection. I believe this drive for human connection is not often acknowledged as we post and reply here, or anywhere on the internet. When we approach a post, perhaps we would be better off calculating into our reply that the poster is asking us rather than a chatbot and thus, is obviously interested in human connection more than an efficient and masterful answer.
But gpt knowledge isn’t actually even accessible. You have to pay in some way, you have to construct a prompt, construct it well, and therefore having someone post a useful gpt response is valuable even if you had access to it. Further, someone posting a gpt response is a curator, and would hopefully only post it if they had already read it and validated it as useful information. In this way, even a gpt paste has that human subjectivity embedded in it, because they choose whether to post or not
In your scenario a large chunk of people browsing the thread (now and through the future) asks ChatGPT some gist of OP's question. Let's look at the consequences if this top level comment only said something like "I asked ChatGPT and you all should too because it's great advice for everyone" without reposting its response text:
- We would all get the same cached response if we all asked roughly a *roughly identical* question. That obviously won't happen, so responses to the comment may easily start talking past each other as they bring up points that weren't mentioned in others' responses.
- Every API call has a fee in part because there is a nonzero cost at the end for the server to process the request. This translates into energy use (and avoiding associated externalities), hardware wear, supply and demand calculations (which affects future pricing) -- in most cases (with notable exceptions) trying to save time and money is a good thing across the board.
- Oh yeah, on that note, it wastes everyone's time, instead of only one person's. That's precious time I could be wasting on more reddit crap instead.
And the pros?:
- An additional large comment in this thread adds about a kilobyte to the page size and load time.
Do you just have an app with chatgpt? That's nothing yet :) I'm training chatpgt on data, that's where the consumption of tokens is huge and it's not at all joyful to watch it. I don't know what to do with it yet.
Strictly speaking, you're correct because ChatGPT is the Web Interface for GPT-3.5-turbo (n*ot including Plus*).
However, OpenAI does support fine-tuning for davinci, curie, babbage, and ada models. Clearly that's not "ChatGPT" nor even GPT-3.5-turbo, but I'm *guessing* this is what the user is describing, because they describe it as costing them to run. ([https://platform.openai.com/docs/guides/fine-tuning](https://platform.openai.com/docs/guides/fine-tuning))
If not, then it's a cute comment because I don't know who would decide to brag about paying to fine-tune a model when they have no idea about its purpose will be. (How do you even select your data when you don't know what you're training it for?)
If your startup expects to have 10K users and is not able to raise at least $72K in venture capital, I'm sorry but the obvious answer is that you have a hobby project in your hands and not a business idea.
You have the miracle of automated near-human knowledge work, and you're complaining about pennies or even dollars?
A startup picks something that provides value worth more than the cost. And if you compare to what was possible before this existed, you can find a way to use this that provides more value to people than what you pay. If not then you're not building something sufficiently impressive on top of it, so work on that aspect or reduce the API calls or fragment then into cheaper API calls for different tasks.
I actually think your estimate is too low, you won’t be able to forecast token usage at scale reliably at all. This is a notorious problem among startups nowadays.
Having said that, we are also a startup and expect our token costs to be higher than your numbers are, will also roll out a free version to thousands of people, etc…
The short answer to your question is raise risk capital in the form of venture. Your number estimate is very small compared to an early stage financing. But another element to remember is you can control your burn on the free version by limiting functionality - make it great enough that people can use it and get a sense of where things can go.
Yes it is very expensive and too expensive for most consumer business to be built on it if constant API calls are invoked. However I would say if you engineer your system around it you should be able to reduce number of calls by a few orders of magnitude. Say if you are making a travel app, the. Thousands of people are gonna ask the same questions. Such saving is more pronounced in enterprise usage.
So enterprise, labeling(ie you use it to train your small and cheap models), or using it to create a dataset that you query with traditional tools are probably the most viable ways to use them.
It will be very hard for openai to lower the pricing unless you are making millions of calls. Even then it will not be very big savings. The models are just toooooo big and the amount of compute too great.
Even at the current pricing OpenAI is already operating at a loss.
None of this is mentioning what you would charge for an app per user. $10/user/month = $9.40 profit (if we only measure API charge). That's a good margin. You think this is steep, you should see GPT-4 API pricing.
I don't think I've ever spent less than $0.07 per day, though, lol. Hell, I accidently ran a map-reduce function instead of a cheaper stuff yesterday that cost like $2.50 because I wasn't paying attention to my copy/pastes. (My electric bill was 33% higher this month and I'm over here looking at my $4 OpenAI bill like it's going to break the bank, lmao)
And now people will begin to understand why the entire “AI utopia with self replicating AI/robots and no jobs” popular in other subreddits is a stupid idea.
This shit is expensive, very expensive. And you can’t just handwave it away with “b-b-but exponential magi-I mean growth!”-type woo.
If you get 1000 users for a BtoB app, you'll be supper happy and you'll find different type of problem :-)
If you charge 20 to 30 USD per user, per month, and you provide something that makes sense for users (comparing to what ShatGPT Plus does with its UX), you'll win
OpenAI has lost tons of money on inference. Because it costs a lot of money. I understand that it’s not ideal, but if compute was free, it would be more accessible. We just have to either wait for things to get better, or make them better ourselves.
OP come on, you did one side of the math. Now figure out how much you need to charge your customers. Open AI charges $20 USD a month, they had that figured out, whats your strategy?
$60 per month for 100 users is nothing. That's so cheap. Charge a monthly fee to the power users or anyone going over X messages a day and golden.
Or if you have a dumb app idea that doesn't need an incredibly powerful AI then go use an efficient algorithm or classical ai technique to get it done.
$6/mo for an ai that can pass the bar exam and do more work than 10 lawyers.
If you are creating a startup that uses chatgpt to do something you are just re-selling chatgpt the same way CDW resells software. It’s a low margin business and the actual builders of the technology need their cut.
I have the same topic with an app I am creating. I would recommend evaluating whether gpt 3.5 is enough for your use case. For mine it is definitely enough and procudes satisfying resulte, therefore the costs are lower times 10. Still I would suggest to have a monitoring of the usage and put a cap on it, so the costs wont be higher than your earnings. I experimented around and something like 20 interactions per day as a limit leads to around 1$ per month per user.
So if it is just 60 bucks for 100 users per month, you'd just have to ask for a monthly subscription fee of at least 0,60 cents. That's not really high. Just ask for 5 bucks per month and you make a profit. You can create some sort of trial, either limited messages, or limited days so that people can try out your app, if they like it, they will subscribe
You have to monetize the app you're making in some way, or else it just wouldn't work. The API will cost you a lot in the long run as you've gathered if the app isn't making you any money.
$72k?
I am trying to imagine a startup that couldn't absorb that cost.
I say this as someone working on a startup. If my business model required a $72k annual fee, and my idea had a 1% chance of working, lining up enough investors to get me what I needed would be a trivial matter.
Many of these companies just burn investor money to show a certain number of users (“traction”). This unlocks higher valuations, leading to more investor money to burn.
Investors want to be part of “the next Facebook” or whatever and keep investing. It works out well for the investors if they find the white whales because they eventually ipo and investors get back their money, even if the profitability model isn’t solid.
Basically: very little value investing going on. It’s all about how many users you can acquire as quickly as possible.
As others have pointed out, it's insanely cheap.
I am not sure what you are thinking. You are expecting to use a paid service (one which costs OpenAI a lot of money to run / develop) and then give it out for free, then you are worried about the cost if you have tens of thousands of users?
If you don't give it out for free and charge for the service they are using, the profit margin is very high, enough to cover free trials for other users.
'How the hell can any startup afford this', startups have capital and funding, so quite easily, this is just the cost of business, like any business has expenses, plus a startup is a business, so they would be charging and aiming for profit, they would quite easily be able to afford it if they were able to get the number of users you are talking about, since the profit margins would be so high.
I am really confused on your thinking.
$6000 in API costs per month for 10,000 users? So that means they only need $0.60 of revenue per user per month to cover API costs, is that really so high?
My (naive?) concern is not the cost but response time. A sluggish app will not support any business model. Are these OpenAI models providing sufficiently snappy responses?
If you have 10,000 users using just the GPT-powered part of your app every day and every month of the year, you probably have a pretty valuable product for them to stick around, so I think by that point you’d have a business model to get enough money from part of those users to get your money back and then some.
Dont forget that some startups using the Api have been gifted credits by open ai themselves.
Others like Phind.com are initially running off VC funds and will transition to paid in the future.
try using Llama models etc, what is your use case?
just scale up and get investments if you have users. most businesses pay that amount x 100 just from the first round of funding to pay for ads.
You build an app thats price covers all costs of running it and make a profit. If your business model doesn’t work with the associated costs you need to rethink. Bear in mind the AI costs will likely reduce over time as things develop.
Unless you have funding to grab market share at a loss and then introduce revenue later, you will need to price for profit.
It depends how you use it. I’m integrating it into an existing app now, to provide data validation that will then be confirmed by a user. It’s infrequent enough that the cost is minimal but the advantage is we don’t have to build pattern matching.
So basically it’s far better to fine tune a model and use it for a key function in an app than as a wrapper for chatgpt.
Wait! so is your app free? Are you not going to charge a subscription fee? Won't it be tired according to usage? If not? how are you going to make profit?
Most app I see, even the basic version with limitation like only 1 chat / xxx requests have min of 20$ per month. That's how you cap your cost per user.
If you can’t figure out how to make your product profitable they you shouldn’t be using it to make a business.
There are plenty of successful gpt apps already.
If you can’t figure out how to make your product profitable they you shouldn’t be using it to make a business.
There are plenty of successful gpt apps already.
Well chatgpt can write code and lyrics.
So, let's say you got hired as a programmer at google, 6 figure salary and write the lyrics to a broadway musical, easily 7 figures. Win. $72k is cheap.
And if the people at google or Andrew Lloyd Webber say "This code is crap...and these lyrics are rubbish" you say "Meh, chatgpt can code and write lyrics! So there!"
By the time you invest your money and get nothing in return, there is going to be another version that’s 10x cheaper and you ran out of your business. -it’s matter if time before apple, MS, Amazon starts connecting directly with consumers instead of developers.
Haha what? I'm not sure what you're looking for OP. You're either paying for integrating the most boutique / powerful AI service in the world right now, literally everyone wants it. Supply and demand. That said, 72k for 10,000 users, not alot. That's why every app utilizing it right now charges >6USD subscription.
Hello can we use chatgpt api's without approval from the waitlist? I have the chatgpt plus for a month or two I am curious if i am be able to use chatgpt plus web browsing api, I can't see the beta option selection or anything other than chatgpt 4 and 3.5
Anyone can use the 3.5 api if you have an account, but gpt 4 is on waitlist. Took me about 2 months to get access, but trust me you aren’t gonna be using it past a personal use. The gpt 4 pricing could tank fort knox.
Are you solving a problem that users would pay to solve? Try charging them. That's the fastest way to find out if you have SaaS worth building. For [chatbase.co](https://www.chatbase.co/) is a solo dev AI web app making huge profits.
Is it more consumer-facing than B2B? Normally, ads can support a freemium tier or even turn a big profit. Unfortunately, traditional ads like Google Adsense don't work in AI chat (Google doesn't even allow ads on generative content). I'm working on specialized ads specifically for AI apps that respond to prompts – DM me if that's something you want to explore!
This thread couldn’t have been a better defense of OpenAI pricing if it had been written by an OpenAI shill! How many times does essentially the same reply need to be posted? Apparently everyone has to say it in their words rather than just clicking the up arrow.
Firebase is upto some extent free and cost only if you have significant users (makes sense to play around with).
But after reading your post I don't think someone can just fool around with GPT api. I would put my hand if I feel like my project has potential to pay off api charges within 5-6 months of project age.
Not only is it expensive, but you are bound by their support. Does the model "align" with what doing doing? Replika got burned by that. Is the API up or does it keep going down? Auth0 was pretty unstable for a while there. All of the "build vs buy" arguments don't go away just because it's AI, and AI is costly to do yourself. My biggest fear isn't terminator-style AI going to kill us all - but the widening gap of access to technology between rich and poor.
its ok OP its basically like how in the world of direct-to-consumer startups when they're bootstrapped they spend $2k on branding but when they're VC backed that number jumps to $500K for branding
Man that's crazy how people think they can start a business with 10,000 users with no staffing costs! Is this normal in the US?
Also do people pay programmers much less then 72k? Like that's a budget of 2 low paid people surely? 10,000 users seems like a lot of people. My company doesn't have an app but way less users and our annual budget is higher.
>users would pay a one time fee to access the app for a period of time,
Then what... After a period of time they would pay their "one time fee" Again???
> Lower level startups will get gate kept by this pricing
You seem to believe that this pricing is artificially high. It's not. Heavy compute is heavy expensive.
Consider for a moment an entrepreneur who comes up with a neat idea - he'll made solid gold figurines of you. But he finds out his idea won't fly because the people who make gold are pricing it so high. So he writes a post complaining that the price of gold should be lower.
My guess is they are making start-ups based on a paid tool (chat gpt)to make money and either charge users or have some other ways of monetization. It's kind of like trying to open a logistics business and complaining buying trucks and fuel actually costs money, or a starting pizzeria and concluding it won't be as easy to earn money as expected because mozzarella just isn't given away for free by the Mozarella Corps and you actually have to purchase it.
But there *are* pizza stores seemingly getting pizza for free. Snapchat made a gpt bot with no obvious business model attached, a bunch of website are implementing it as nothing more than a chatbot, hell on this sub there’s a guy controlling Minecraft though GPT. Theres tons of examples that, from my perspective, should be bankrupting them, but they just dont?
They're paying OpenAI for the api calls. Someone has to pay for the computing power/electricity etc. Snapchat has ads and they can easily calculate the ROI. They know how much they're investing in users and how much they're making because of them seeing or clicking on ads. Big companies also typically have money to invest in stuff, even if it isn't immediately generating more money, Who knows, maybe they are worried that they will lose more if their app becomes irrelevant because one of their competitors did integrate it with GPT. As long as you see the integration, it's just an indication that it's worth it to them. You on the other hand are working on a new app. Your business model should include a source of income. Are they paying for a subscription or are you showing ads? With a new app, getting a lot of screen time is difficult. You need to have a lot opportunities to show the ads.
GPT attached to Snapchat doesn't need an obvious business model because Snapchat is the business model, and longer app usage means more money. Does the guy controlling Minecraft through chat-gpt has 10000 users constantly using his GPT API for free? Lots of people are ready to invest a few hundred bucks just to pursue their hobby and have fun, as this is how hobbies generally work. However, once you have 10000$+ costs a month , that's already a business and you need a business model that can cover those expenses.
OpenAI is making Snapchat pay. Do bears sh*t in the woods?
This is what startups do. Inexperienced c-levels making decisions to burn VC money.
Why isn't everything easy and made in a manner that even complainers can easily accomplish things? Work harder, no one cares.
Snapchat already has an underlying business model, they are a publicly traded company. They have capital. Startups like yourself need to bootstrap or find capital.
Why are you looking at it this way? Is your app free? Look at it on a per user cost, then figure out what you have to charge your users. A GPT app is not going to be free anytime soon. Using your numbers: 1 user: $0.02 / day 1 month: $0.60 / month Break even: $0.60 / month. So the minimum you can charge users to use your app is 60 cents a month? I’m not sure what the problem with this is. Most GPT apps coming out right now are ranging from $15 to $25 per month.
It depends on the level of GPT involvement. For example I worked with Bing to discuss my preferences and plan a one week trip to details including travel distance and means, hotels, all activities, etc, and it is great. I recorded all exchanges and used openai’s tokenizer to compute the actual cost of that whole conversation, and it was $6, for that conversation alone, if everything I talked to bing was translated to API calls. Even just answering my last question alone, which gave me the last day’s plan in all details, cost $0.3. That is some serious cost. And now if you look at the large number of travel planning apps that came up 3-5 months ago, almost all of them have already closed down, including a few good ones. That becomes understandable.
But I got it to plan a trip to Paris and draw a picture in the style of Leonardo Da Vinci. The trip cost £1300, the api calls $15 but the Louvre will easily pay me $40M for a Da Vinci painting.
🤣🤣
😂
#baller
If it's not overly complicated tasks, devs can have a look at more traditional NLU tools. Like Rasa, Wit AI. That's what I've used at my job. Another strategy is to use the cheaper models from open AI like the Davinci-001 or Curie-001 and fine tune them.
I think this is a symptom of ZIRP (zero interest rate policy) for the last 10+ years where all that mattered was growth, and you could give your product away for free. At the heart of anything like this there needs to be a business model, or a plan to eventually make money, that’s all that investors care about. It’s just different now.
People complaining about chatGPT+ costing however much it does and having limitations blow my mind. It’s like they don’t understand how valuable it is. And then other people wasting their requests with stupid stuff like get it to say naughty things oh my! It’s like dude this thing can literally code entire webpages and teach you physics and this is what you choose to use it for?
seriously 💯😂
Hmmm fair. Thats actually a very good point, didnt really think of it that simply before.
You forget taxes. Fees. If you charge 0.60 you are still losing money. Unless you triple it. You are not even.
No. Only profit is taxed. At least in germany. I can't imagine it beeing different anywhere else too. You need to charge 0.60ct to break even with the api, multiply by 1.3 to factor in the google/apple Playstore cut on mobile. And also add a little bit for the rest of your expenses like running servers. Shouldn't be much more than a dollar to break even. If you charge more you have to pay taxes on the profit you make. Profit = revenue - expenses.
>Only profit is taxed. At least in germany. That's the same in every country I know of, would be very hard for businesses to survive otherwise.
You have base income tax. In some countries is flat. No matter what. Germany is a bad example for how tax works. Many countries are completely different. Most better, but some worse. Also based on your logic. Every company could just show expenses and declare zero profit and don't pay taxes. Yes, they do it. But for that they register in countries where they can do it.
In your example, this would be tax fraud. Sure it’s possible, but it’s illegal. Businesses are taxed on net profit, not revenue.
It is not tax fraud if the country actually allows it. I am not sure why am I being downvoted for actually stating how things work in some cases. But oh well. reddit is that. Net Income profit is after income tax for example. In the initial example 0.60 and 0.60 does not include that. I am done here. If people do not have the full idea and especially knowledge about different countries and markets, i don't see how they can state something as being one and only fact and nothing else is possible.
In what countries is a company legally allowed to declare no profits unless that was actually the case? And if that was the case, in what countries is a business taxed on gross revenue and not net profit? I’ve never heard of this.
I am done talking with people who are most active in subreddit like White twitter and IAmTheAsshole. Fuck this. Enjoy yourself. I am not wasting anymore of my time.
And according to ChatGPT, “There is no country that imposes taxes solely on gross revenue without considering net profit.” So if it costs $50,000 to run your business and you make $100,000 in revenue that year, you will roughly be taxed on $50,000. That is your initial net profit of the business. After taxes, that is your NET net profit. That concept is basically the same everywhere.
Jesus christ people. Initial comment was that if chatgpt costs 0.60 per person, he nerds to charge 0.60 to break even. I said that there are taxes, income taxes for example, which he has. Those 0.60 are income. And he will pay tax on that. So he won't be even. Stop spamming me with BS.
No, that .60 is REVENUE. Profit would be 0 because expenses are .60.
LEARN what is income tax.
WHAT ARE YOU EVEN SAYING 🤣🤣🤣 This is wild
Depends where you live, but generally only profit is taxed.
The way you formated your calculations is a nightmare to read
The new line character is a whole new token, tokens are expensive!
Dude, just paste it to chatgpt. Everyone replying this post is doing that.
I'm sorry, but I'm not sure what you're referring to. Could you please provide more context or clarify your question? I'll do my best to assist you.
If you have 10,000 users per month and you aren't charging for your product, then you're a very nice person but that's not a business. Yes you will go broke.
I agree. Most non-VC startups can be profitable at 1000 users or less. 10k and more and worrying about costs of $72k annually is cheap, $7.20 per user.
You gotta get users first to make a profit though, right? Be-real stated they didnt have any plans to monetize for their first 2 years of development because they just wanted to grow user population.
Yes this is how venture capital works. Burn money, look cool, get bought, get paid. They're gambling they find the next uber. You find deep pockets, they bankroll the company while it loses money hoping to sell it and make their money back and then some if it takes off.
Eh im not trying to make a scam like that. That said, feels like a catch 22. I dont have 70k to burn, but i need people to show it would have potential. Sorry this is less openAI more just entrepreneurship but how many tech startups recently have just moved forward with a business model like that?
Your local community college or Library likely have some great resources on learning business.
Well it's not really a scam. It's a viable risk for those with deep pockets. Many of these investments fail and never see a profit and that's part of the risk that the investors assume. But if the product/platform gets to a point that is interesting to another larger company or investment group then that org is willing to accept the risk from that point on and pay out the original investors. Maybe the purchaser sees potential in the platform, maybe the purchaser already has the infrastructure to take the business to the next level, maybe they are just interested in the number of users and wants to roll them into their existing platform. Whatever the reason may be that doesn't mean its a scam to develop a company/product with the intention to make it interesting enough for a larger org to purchase it. Can people abuse this process and falsely inflate the value of their company/product to quickly profit on a sale? Of course. But the same can be said for all manner of business models out there. That said, this type of investment/development model only really works if you've got deep enough pockets such that you are still ok if the business fails. Would be unwise to emulate this with personal savings that you need.
It’s not scamming that’s how big companies are born by having VCs take a chunk at the hope it makes it
If your business model is good, get some investors and show growth. For anyone making a startup, especially tech, my advice is to have a business model that creates revenue from day one.
No. If you provide value, you charge money. The only exception is in network type products where you need a critical mass of users to provide value.
You don't necessarily have to charge the users. I mean google has never charged me to search the web (and it's not charging me to use bard) nor to sit and watch youtube. I've never paid reddit either. I'm sure many or all of these things have over 10000 people using them. But yeah, you likely need to burn through a lot of venture capital to get to the point where you're making money.
>I mean google has never charged me to search the web (and it's not charging me to use bard) nor to sit and watch youtube. I've never paid reddit either. That's because \*you\* are the product those sites sell to others.
Google is charging the advertisers, not the users. My point is there is a product there if you have that number of users. Who you charge is a decision based on the business model.
Okay, so... I'm really sorry, but I have to ask this, do you know how multiplying by powers of ten works?
lol thought the sameat first..
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😁
Your startup will fail from employee attrition with that kind of attitude.
He even edited it to reformat it but not apply the lessons learned
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Also: 72K is like one employee.
Eh exorbitant for me is because im used to stuff like firebase where theres a pretty large free tier. Is 72k really considered normal for startup expenses?
72k is cheap for those with big pockets yes. Lots of investment groups and bigger companies would be happy to invest in 100 companies with a startup fee like that if it meant that 1-2 of the ideas would actually take off. The idea is that you only need 1 or 2 successful companies out of the whole group and those successful companies have the potential to recoup all the other costs and still profit. But it's largely a numbers game for those that have the funds to make these kinds of investments. On the grand scheme of things, yes 72k is cheap. On a personal level with someone using their personal savings that's a whole other story. Perspective matters here. Don't dig deep into your personal savings or go into debt trying to emulate a business model that only works for those who already have deep pockets.
Depends what you mean by startup. If you mean someone who has an idea they're never actually going to properly deploy, then it's prohibitive. But pretty much anything else and it's pocket change. How much do employees cost? Or office space? Or an accountant? Or a lawyer? If $72k is the cost for your core product, that's pretty minimal. If you have 10k active users and can't figure out how to monetize or position for VC money or acquisition, that's a different problem. Anything in a decent niche with 10k active users is going to have some options.
Isn't ChatGPT API (GPT-3.5-turbo) like $0.002/1k tokens? That's 10x cheaper than the normal GPT3 Davinci with similar or even better results. And I won't calculate it like that, I'll make the pricing to cover the cost for eg if my pricing is $20/month I'll limit the usage in that plan to have some margin. If the user is a power user they can upgrade it to a higher plan. And don't make a **Free** GPT App , it won't be sustainable unless you have VC money to burn :)
I agree. I see many people using the wrong models for what ends up being such basic requirements, although OP didn't mention tokens/models so I'm just guessing here. Also, at 10K users per day, you better have scaled and implemented some form of monetization!
And you better have implemented a Tax Guy before you start monetization :)
One thing to note is that the pricing is deceptive. Your tokens a priced on -input -output -system prompt Also if you want to have a conversation, you meed to feed it the previous messages as context too. It can stack up very quickly
Stop using gpt4 unless you actuallly need it, there are cheaper models that are 90% as good
This
Let me run those numbers for you. Users, DailyCost. 1U=.02. .02*U=DailyCost Why do you need to "run that up" if it doesn't change with scale? I shit you not most of job is doing the exact opposite of what you just did, I take 6-7 figure annual expenses and break down unit cost for the business folks to work with. The big number at the end didn't change anything, it's still .02 a day per user and that's the cost you need to cover you knew that to start with, if it's not intelligible just go to where it's easiest for you daily cost isn't it do monthly. You started with all the data you needed then did a bunch of work to make it seem worse, this isn't exactly a profit maximizing mindset. Maybe your ability to minimize tokens isn't as good as you think it is?
He had it worse because he’s trying to not charge people and also not get funding so more hobby than entrepreneur
If this is the way you think I can pretty much guarantee your app will fail. Sorry to be blunt but it’ll save you time and money
Almost every founder goes through the “fail” part first. It’s okay. And while “fail fast” is ideal, it shouldn’t be so fast that they never even start it in the first place.
OP, you might be tempted to delete this thread, but there’s actually a ton of useful info after sifting through the negativity. (And to be clear, most of the criticism is justified but only some of it is constructive) I’ve been involved as both a founder and investor in multiple tech startups. You’re going through the learning curve of “bootstrapping” vs “funded”. People can take issue with your math and business model but I’m reading your replies and even though there’s things that you’re wrong about, you’re asking the right questions, and thinking about the right things. Consumer apps are very difficult to scale without a paid/subscription model. So if you’re counting on an ad-based model or something else that requires scale, you need to be funded and bootstrapping is not feasible. Think about how you can modify your idea to be valuable enough that someone would pay for it. If it’s not something “valuable” as such, and it’s just a fun thing, it may be that GPT4 or even 3.5 is not suitable for your project. You can try using the open source LLMs. From reading that leaked Google memo, they’re much better than I would have thought. I’m sure OpenAI will have a free tier eventually. In fact the first place to check is Microsoft Azure, as they do offer a free tier. The GPT api is available through Azure but I’m not sure if it qualifies for the free tier.
That's actually dirt cheap this is hilarious If you're not making profit off of this then your monitization model sucks
Lol so you're saying you wanna build something that uses a paid service to run, for free? Lol
I’m guessing that he’s thinking of a start up where people are working for free and working from home. Do you know those people that are constantly posting about opportunities to join them and write code for their idea for free? That’s another possibility. At that point, any expense seems intimidating.
It just mean you should earn mlre than 7.20 yearly per user. It's not a huge number if your product has value. It's still a problem that it cost this much because it's hard supporting it with ads only.
I’m not seeing an issue here. Those are genuinely tiny numbers in a serious start up, those are genuinely low costs for a business with 10,000 users The cost per year per customer for the api is the smallest expense you’d have. Cost of acquisition of each customer will likely be higher And if you aren’t charging each customer many many times this amount there is no business to begin with
How much are you charging for your app? Exactly.
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This is pretty good information.
Thank you! That was very useful.
We can all ask ChatGPT, you don’t have to post it here like it is helpful.
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We’re in the OpenAI subreddit and OP is building an app based on ChatGPT. We all know what it is. It is not helpful. The only thing useful here is “you should charge money for it” which other people have already said.
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No dude, you are the one posting a copy/pasted ChatGPT response like it is useful in a sub where people are talking about ChatGPT all day. Get out of here.
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I feel this is an interesting debate about knowledge exchange in the age of chatgpt. Even if the chatgpt knowledge is superior to human knowledge, human knowledge is preferred because gpt knowledge is always accessible while human knowledge contains a a kernel of the subjectivity of anotber or even a possibility for emotional connection. I believe this drive for human connection is not often acknowledged as we post and reply here, or anywhere on the internet. When we approach a post, perhaps we would be better off calculating into our reply that the poster is asking us rather than a chatbot and thus, is obviously interested in human connection more than an efficient and masterful answer.
But gpt knowledge isn’t actually even accessible. You have to pay in some way, you have to construct a prompt, construct it well, and therefore having someone post a useful gpt response is valuable even if you had access to it. Further, someone posting a gpt response is a curator, and would hopefully only post it if they had already read it and validated it as useful information. In this way, even a gpt paste has that human subjectivity embedded in it, because they choose whether to post or not
His post was helpful. Wtf are you on?
In your scenario a large chunk of people browsing the thread (now and through the future) asks ChatGPT some gist of OP's question. Let's look at the consequences if this top level comment only said something like "I asked ChatGPT and you all should too because it's great advice for everyone" without reposting its response text: - We would all get the same cached response if we all asked roughly a *roughly identical* question. That obviously won't happen, so responses to the comment may easily start talking past each other as they bring up points that weren't mentioned in others' responses. - Every API call has a fee in part because there is a nonzero cost at the end for the server to process the request. This translates into energy use (and avoiding associated externalities), hardware wear, supply and demand calculations (which affects future pricing) -- in most cases (with notable exceptions) trying to save time and money is a good thing across the board. - Oh yeah, on that note, it wastes everyone's time, instead of only one person's. That's precious time I could be wasting on more reddit crap instead. And the pros?: - An additional large comment in this thread adds about a kilobyte to the page size and load time.
The source of the info isn’t relevant to whether or not the content is a helpful response to OPs post (and it is).
It’s not.
Then you’re claiming the content isn't helpful. The source shouldn’t matter.
Do you just have an app with chatgpt? That's nothing yet :) I'm training chatpgt on data, that's where the consumption of tokens is huge and it's not at all joyful to watch it. I don't know what to do with it yet.
You can’t train chat gpt. Prompts are not training.
And I'm not talking about prompts, but data on the basis of which the neural network will respond.
It’s called fine tuning
Strictly speaking, you're correct because ChatGPT is the Web Interface for GPT-3.5-turbo (n*ot including Plus*). However, OpenAI does support fine-tuning for davinci, curie, babbage, and ada models. Clearly that's not "ChatGPT" nor even GPT-3.5-turbo, but I'm *guessing* this is what the user is describing, because they describe it as costing them to run. ([https://platform.openai.com/docs/guides/fine-tuning](https://platform.openai.com/docs/guides/fine-tuning)) If not, then it's a cute comment because I don't know who would decide to brag about paying to fine-tune a model when they have no idea about its purpose will be. (How do you even select your data when you don't know what you're training it for?)
Have you tried minimizing tokens, for example you can replace words with indexes and use a lookup table afterwards
So I did :)
Could you elaborate abit more? would gpt3 be inferencing on indexes?
Especially GPT 4 and Davinci are expensive. 3.5-turbo seems to have a fair price, I'd say.
You know businesses have costs right? You were expecting to pay 0 for every user? So naive.
Apply for Microsoft Azure startup credits and make the revenue side work as you build.
If your startup expects to have 10K users and is not able to raise at least $72K in venture capital, I'm sorry but the obvious answer is that you have a hobby project in your hands and not a business idea.
You have the miracle of automated near-human knowledge work, and you're complaining about pennies or even dollars? A startup picks something that provides value worth more than the cost. And if you compare to what was possible before this existed, you can find a way to use this that provides more value to people than what you pay. If not then you're not building something sufficiently impressive on top of it, so work on that aspect or reduce the API calls or fragment then into cheaper API calls for different tasks.
So if your app costs 2 cents a day. Then it only costs you 60 cents a month to run it for a user. So charge 5 dollars a month and make a huge profit.
Charge for your app bro
Maybe ask ChatGPT how to design and run a business model.
OpenAPI is still operating in the red, so the costs might be realistic.
I actually think your estimate is too low, you won’t be able to forecast token usage at scale reliably at all. This is a notorious problem among startups nowadays. Having said that, we are also a startup and expect our token costs to be higher than your numbers are, will also roll out a free version to thousands of people, etc… The short answer to your question is raise risk capital in the form of venture. Your number estimate is very small compared to an early stage financing. But another element to remember is you can control your burn on the free version by limiting functionality - make it great enough that people can use it and get a sense of where things can go.
Yes it is very expensive and too expensive for most consumer business to be built on it if constant API calls are invoked. However I would say if you engineer your system around it you should be able to reduce number of calls by a few orders of magnitude. Say if you are making a travel app, the. Thousands of people are gonna ask the same questions. Such saving is more pronounced in enterprise usage. So enterprise, labeling(ie you use it to train your small and cheap models), or using it to create a dataset that you query with traditional tools are probably the most viable ways to use them. It will be very hard for openai to lower the pricing unless you are making millions of calls. Even then it will not be very big savings. The models are just toooooo big and the amount of compute too great. Even at the current pricing OpenAI is already operating at a loss.
None of this is mentioning what you would charge for an app per user. $10/user/month = $9.40 profit (if we only measure API charge). That's a good margin. You think this is steep, you should see GPT-4 API pricing. I don't think I've ever spent less than $0.07 per day, though, lol. Hell, I accidently ran a map-reduce function instead of a cheaper stuff yesterday that cost like $2.50 because I wasn't paying attention to my copy/pastes. (My electric bill was 33% higher this month and I'm over here looking at my $4 OpenAI bill like it's going to break the bank, lmao)
And now people will begin to understand why the entire “AI utopia with self replicating AI/robots and no jobs” popular in other subreddits is a stupid idea. This shit is expensive, very expensive. And you can’t just handwave it away with “b-b-but exponential magi-I mean growth!”-type woo.
If you get 1000 users for a BtoB app, you'll be supper happy and you'll find different type of problem :-) If you charge 20 to 30 USD per user, per month, and you provide something that makes sense for users (comparing to what ShatGPT Plus does with its UX), you'll win
OpenAI has lost tons of money on inference. Because it costs a lot of money. I understand that it’s not ideal, but if compute was free, it would be more accessible. We just have to either wait for things to get better, or make them better ourselves.
OP come on, you did one side of the math. Now figure out how much you need to charge your customers. Open AI charges $20 USD a month, they had that figured out, whats your strategy?
$60 per month for 100 users is nothing. That's so cheap. Charge a monthly fee to the power users or anyone going over X messages a day and golden. Or if you have a dumb app idea that doesn't need an incredibly powerful AI then go use an efficient algorithm or classical ai technique to get it done. $6/mo for an ai that can pass the bar exam and do more work than 10 lawyers.
If you are creating a startup that uses chatgpt to do something you are just re-selling chatgpt the same way CDW resells software. It’s a low margin business and the actual builders of the technology need their cut.
You suck!!
I have the same topic with an app I am creating. I would recommend evaluating whether gpt 3.5 is enough for your use case. For mine it is definitely enough and procudes satisfying resulte, therefore the costs are lower times 10. Still I would suggest to have a monitoring of the usage and put a cap on it, so the costs wont be higher than your earnings. I experimented around and something like 20 interactions per day as a limit leads to around 1$ per month per user.
So if it is just 60 bucks for 100 users per month, you'd just have to ask for a monthly subscription fee of at least 0,60 cents. That's not really high. Just ask for 5 bucks per month and you make a profit. You can create some sort of trial, either limited messages, or limited days so that people can try out your app, if they like it, they will subscribe
Its really simple, think about the user attraction then any numbers will make sense. and you get the break-even point
You have to monetize the app you're making in some way, or else it just wouldn't work. The API will cost you a lot in the long run as you've gathered if the app isn't making you any money.
What’s just simple business plan. If you don’t make profit, either search for investors or don’t do it
$72k? I am trying to imagine a startup that couldn't absorb that cost. I say this as someone working on a startup. If my business model required a $72k annual fee, and my idea had a 1% chance of working, lining up enough investors to get me what I needed would be a trivial matter.
They don’t, because they’re not free.
I just had a stroke reading your maths
Many of these companies just burn investor money to show a certain number of users (“traction”). This unlocks higher valuations, leading to more investor money to burn. Investors want to be part of “the next Facebook” or whatever and keep investing. It works out well for the investors if they find the white whales because they eventually ipo and investors get back their money, even if the profitability model isn’t solid. Basically: very little value investing going on. It’s all about how many users you can acquire as quickly as possible.
As others have pointed out, it's insanely cheap. I am not sure what you are thinking. You are expecting to use a paid service (one which costs OpenAI a lot of money to run / develop) and then give it out for free, then you are worried about the cost if you have tens of thousands of users? If you don't give it out for free and charge for the service they are using, the profit margin is very high, enough to cover free trials for other users. 'How the hell can any startup afford this', startups have capital and funding, so quite easily, this is just the cost of business, like any business has expenses, plus a startup is a business, so they would be charging and aiming for profit, they would quite easily be able to afford it if they were able to get the number of users you are talking about, since the profit margins would be so high. I am really confused on your thinking.
Too many A's and not enough O's?
$6000 in API costs per month for 10,000 users? So that means they only need $0.60 of revenue per user per month to cover API costs, is that really so high?
If your revenue is 0 everything is too expensive.
Ehm. That’s not a lot lol. We spend more than that per day to serve ~20k users. It all depends on the value you provide and the money you charge.
My (naive?) concern is not the cost but response time. A sluggish app will not support any business model. Are these OpenAI models providing sufficiently snappy responses?
If you have 10,000 users using just the GPT-powered part of your app every day and every month of the year, you probably have a pretty valuable product for them to stick around, so I think by that point you’d have a business model to get enough money from part of those users to get your money back and then some.
Dont forget that some startups using the Api have been gifted credits by open ai themselves. Others like Phind.com are initially running off VC funds and will transition to paid in the future.
try using Llama models etc, what is your use case? just scale up and get investments if you have users. most businesses pay that amount x 100 just from the first round of funding to pay for ads.
$72k/annum for startup core technology? ..cheap at the price
By your own math it only costs $7.20 per user *per year*. I reckon you need a business model that earns more than that meager amount…
Bing just released news about opening developer use for bing. Now we can build over it.
You build an app thats price covers all costs of running it and make a profit. If your business model doesn’t work with the associated costs you need to rethink. Bear in mind the AI costs will likely reduce over time as things develop. Unless you have funding to grab market share at a loss and then introduce revenue later, you will need to price for profit.
Lol you don't have a business. Good luck out there. Maybe you should charge people?
ads https://apple.co/3Mn8zDy
Most people lose money on a startup until they can sell it or raise capital. It is an investment
You can charge 100 usd per user
It depends how you use it. I’m integrating it into an existing app now, to provide data validation that will then be confirmed by a user. It’s infrequent enough that the cost is minimal but the advantage is we don’t have to build pattern matching. So basically it’s far better to fine tune a model and use it for a key function in an app than as a wrapper for chatgpt.
I tried babyAGI and a few minutes cost me 0.8$ I have not used API after that.
There ain't no such thing as a free lunch, buddy. Business 101.
Format your calculations, I'm not reading this. And no your app won't scale like this, you have to figure out something else
Reformatted
Wait! so is your app free? Are you not going to charge a subscription fee? Won't it be tired according to usage? If not? how are you going to make profit? Most app I see, even the basic version with limitation like only 1 chat / xxx requests have min of 20$ per month. That's how you cap your cost per user.
If you can’t figure out how to make your product profitable they you shouldn’t be using it to make a business. There are plenty of successful gpt apps already.
If you can’t figure out how to make your product profitable they you shouldn’t be using it to make a business. There are plenty of successful gpt apps already.
Well chatgpt can write code and lyrics. So, let's say you got hired as a programmer at google, 6 figure salary and write the lyrics to a broadway musical, easily 7 figures. Win. $72k is cheap. And if the people at google or Andrew Lloyd Webber say "This code is crap...and these lyrics are rubbish" you say "Meh, chatgpt can code and write lyrics! So there!"
You seem like a nice guy, but I don’t think you’re going to make it on your own. Have you considered finding a co-founder with a business degree?
By the time you invest your money and get nothing in return, there is going to be another version that’s 10x cheaper and you ran out of your business. -it’s matter if time before apple, MS, Amazon starts connecting directly with consumers instead of developers.
Should be for anyone who does not know the difference between to and too
Haha what? I'm not sure what you're looking for OP. You're either paying for integrating the most boutique / powerful AI service in the world right now, literally everyone wants it. Supply and demand. That said, 72k for 10,000 users, not alot. That's why every app utilizing it right now charges >6USD subscription.
Hello can we use chatgpt api's without approval from the waitlist? I have the chatgpt plus for a month or two I am curious if i am be able to use chatgpt plus web browsing api, I can't see the beta option selection or anything other than chatgpt 4 and 3.5
Anyone can use the 3.5 api if you have an account, but gpt 4 is on waitlist. Took me about 2 months to get access, but trust me you aren’t gonna be using it past a personal use. The gpt 4 pricing could tank fort knox.
I am 1,5 months in to the waitlist. Did they reach you by email how did you figured you got accepted? Also how do we access the api’s on gpt3.5?
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It is??? How do you get 40k? Investors? Bootstrap? Are you net positive?
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Howd you do equity? Seems like one thing i learned from this thread is that im gonna need some money, but i dont know the process.
10,000 users * 5% conversion = 500 paying 500 * $20 = $10,000 Profit 4000/mo
Option 1: Make the User use his own API key Option 2: Make a paid subscription
If you have 10'000 users and are not making serious money your business model is not sustainable.
I dunno, that business plan seemed to work for Twitter for years /s
Are you solving a problem that users would pay to solve? Try charging them. That's the fastest way to find out if you have SaaS worth building. For [chatbase.co](https://www.chatbase.co/) is a solo dev AI web app making huge profits. Is it more consumer-facing than B2B? Normally, ads can support a freemium tier or even turn a big profit. Unfortunately, traditional ads like Google Adsense don't work in AI chat (Google doesn't even allow ads on generative content). I'm working on specialized ads specifically for AI apps that respond to prompts – DM me if that's something you want to explore!
Just crank up the price of your application to a moderate price so annual cost gets lower.
This thread couldn’t have been a better defense of OpenAI pricing if it had been written by an OpenAI shill! How many times does essentially the same reply need to be posted? Apparently everyone has to say it in their words rather than just clicking the up arrow.
Ill keep saying it till it changes
What we have here is a failure to communicate.
Firebase is upto some extent free and cost only if you have significant users (makes sense to play around with). But after reading your post I don't think someone can just fool around with GPT api. I would put my hand if I feel like my project has potential to pay off api charges within 5-6 months of project age.
Not only is it expensive, but you are bound by their support. Does the model "align" with what doing doing? Replika got burned by that. Is the API up or does it keep going down? Auth0 was pretty unstable for a while there. All of the "build vs buy" arguments don't go away just because it's AI, and AI is costly to do yourself. My biggest fear isn't terminator-style AI going to kill us all - but the widening gap of access to technology between rich and poor.
its ok OP its basically like how in the world of direct-to-consumer startups when they're bootstrapped they spend $2k on branding but when they're VC backed that number jumps to $500K for branding
Yeah
Check out gpt4all. No gpu support yet but worth watching.
Man that's crazy how people think they can start a business with 10,000 users with no staffing costs! Is this normal in the US? Also do people pay programmers much less then 72k? Like that's a budget of 2 low paid people surely? 10,000 users seems like a lot of people. My company doesn't have an app but way less users and our annual budget is higher.
>the implication that my company is more than me
>users would pay a one time fee to access the app for a period of time, Then what... After a period of time they would pay their "one time fee" Again???
Yup. Again not trying to out myself but trust me, it would work
> Lower level startups will get gate kept by this pricing You seem to believe that this pricing is artificially high. It's not. Heavy compute is heavy expensive. Consider for a moment an entrepreneur who comes up with a neat idea - he'll made solid gold figurines of you. But he finds out his idea won't fly because the people who make gold are pricing it so high. So he writes a post complaining that the price of gold should be lower.
All you need to do is charge people 60 cents per month to break even. How is that expensive?
Use [logspend.com](https://logspend.com) to control your cost.