For folks who are headscratching here, back in about 2007 (I remember it because I was getting into Rails) Joyent's precursor company TextDrive bootstrapped some hardware purchases by selling a (barely capable of running Rails, fairly rare for the time) shared hosting account. The kicker was that you'd pay about ~18 months upfront and it would be Lifetime. I don't trust my memory for numbers but somewhere between $150 and $300 if I recall correctly.
I actually used them as a hosting provider for a while, and followed the support forums. Supporting the Lifetime offering was a challenge pretty much from the getgo, because some folks were less than neighborly with their usage of system resources, partially out of ignorance, partially out of Rails playing very poorly with shared systems, and partially because you attract an interesting type of customer with this offering. The physical hardware had some faults and probably has not improved much over time.
Meanwhile, shared hosting for Rails is, well, not a very attractive option over the last couple of years, thanks to VPSes, Heroku, Amazon, etc etc. Joyent apparently wants to exit the business.
Of note: I remember somebody asking Slicehost to match the business model and Matt shot them down saying that it was too gimmicky for his taste and wouldn't be mutually beneficial. Slicehost eventually came up with a neat solution towards the same end: they were oversubscribed, so they sorted their waiting list by the amount of non-refundable deposit you were willing to make, giving them much-needed cash flow without committing them to service for forever.
There were actually a number of "VC" phases with TextDrive, starting with the "VC200" in 2004 that raised $40,000 from 200 pledges of $200 to acquire and set up the hardware--
That was followed by a number of upgrade offerings ("Mixed Grill", "3 Martini Lunch") in subsequent years, extending into the Joyent merger/acquisition, that required a larger lump-sum payment.
Their pitch on lifetime service? "How long is it good for? As long as we exist."
Now, you can argue in strictly financial terms that those initial customers (of whom I'm one) have probably got their money's worth, and that the hosting landscape has changed sufficiently that the lifetime products are peripheral to Joyent's main business. The counterargument is that Joyent not only acquired TextDrive's customers, but the goodwill surrounding Dean Allen's original venture, and has traded on that goodwill ever since. Clearly, they feel that's not worth much these days.
Furthermore, giving people who've had eight years of not having to think about hosting options just 80 days to migrate, with explicit notice that their servers will be shut down and wiped on October 31, strikes me as pretty cheap.
As far as getting one's money's worth, the "VC-like" pitching makes that odd. Obviously it wasn't an actual VC arrangement, but it had some similar aspects: you take a risk by giving $X now to buy a "lifetime account" with some startup that might be bankrupt next year. In return for helping to fund them and accepting that downside risk, your potential upside is that if they do succeed and exist long-term, you get what would in retrospect be below-market-priced service as a reward for your early support.
It doesn't make much sense to say that, hey, thanks for the "VC" investment when it was a risk to buy from us, but now that we're successful, you've gotten your money's worth.
I switched across to the Mixed Grill in May 2006 (right around when John Gruber quit Joyent to do Daring Fireball full-time, I remember). It cost $499USD.
Did I expect more than 6 years? Yeah, I took them at their word - "as long as we exist".
Their behavior here is embarrassing and labels them as not trustworthy in the future. Pacta sunt servanda. The other side ending up potentially getting the better end of the deal, a nowhere near certain thing here from a 2004-6 perspective where their customers took significant risk taking the deal, is not an equitable reason to terminate the services.
Matt, I was a very early slicehost customer, and just wanted to say thanks for the years of great service and straightforward business. I really loved what you did and hope you're continuing to do well. Cheers!
I paid $1399 for my TextDrive/Joyent "Three Martini Lunch" hosting, about six years ago. Which works out around $20/month. In retrospect, paying that amount up front doesn't seem "too good to be true", unfortunately.
For abuse, which seems somewhat reasonable. And for the other people, they offered their money back, which is probably the best way to solve this kind of thing.
>We're pleased to announce a special offer that combines three great products in our family — TextDrive, Strongspace and Joyent — available for a one-time payment of just $499.
>What do you get?
>TextDrive's spectacularly feature-rich web, mail and data hosting; oceans of backup room at Strongspace; early access to the future of web-based organization, communication and productivity through the Joyent suite of interconnected applications. Perfect for a smart small business or smart individuals of any size.
True. You'd have sue and first get the arbitration clause revoked. My understanding is that courts are getting more amenable to this.
Dittos restrictions on class actions.
My policy is that I will generally reject arbitration / class action limitations and/or take my business elsewhere.
Of course, it's always possible that the arbitrator would find for the claimant, but such clauses usually (didn't check here) disallow class actions, and arbitrators are historically biased toward the entity requiring their services (e.g.: Joyent in this case).
Which (if you signed up at the end of 2006 and just got cancelled) comes out to about $7.50 a month. That's more than a EC2 micro instance on a 3 year reserved plan.
At the time, though, most people were just happy to find an easy solution to Rails hosting. I think TextDrive was the first provider in that price range that actually supported Rails. (Remember, this was before Passenger and all that made it easy to host Rails.)
Dividing a user's costs by the number of months of service they got isn't fair because it ignores the high risk they took on that the company would go out of business months after they dropped their $500 or $1000 or whatever.
Looking at my email I saw my Textdrive Lifetime hosting account was made in Sept 2005. I'm pretty sure I wasn't in on the first round either and I was second round "VC".
They also offered a lifetime package known as "Mixed Grill" and "3 Martini Lunch" that bundled the hosting, Strongspace (a file storage solution based on SFTP/rsync -- now spun off to a different company) and some collaboration suite (from Joyent).
I was (am?) also a TextDrive VCII customer. I signed up in March of 2005 and had a little home on a server called nelson. If my memory is correct it was around $450 or so and I hemmed and hawed over the decision. I was just getting out of the debt I had built up after the post-college/dotcom recession and it was a lot of money for me. However, I knew that I was going to continue programming for my career and so I saw it as an investment in them as well as myself. In 2008 I was asked to move to a Joyent shared accelerator (drake) and everything continued along.
I saw it as a genius business move for them: they got upfront capital in exchange for a promise to offer a commodity that their customers would naturally outgrow. Those customers would likely be highly influential and/or become power-users. Furthermore they would be able to grow bigger than they would otherwise without having to take VC money (which at the time was harder to come by and the VC had a lot more power/control). Now we have things like Kickstarter so the idea doesn't seem so strange anymore.
I actually used them as a hosting provider for a while, and followed the support forums. Supporting the Lifetime offering was a challenge pretty much from the getgo, because some folks were less than neighborly with their usage of system resources, partially out of ignorance, partially out of Rails playing very poorly with shared systems, and partially because you attract an interesting type of customer with this offering. The physical hardware had some faults and probably has not improved much over time.
Meanwhile, shared hosting for Rails is, well, not a very attractive option over the last couple of years, thanks to VPSes, Heroku, Amazon, etc etc. Joyent apparently wants to exit the business.
Of note: I remember somebody asking Slicehost to match the business model and Matt shot them down saying that it was too gimmicky for his taste and wouldn't be mutually beneficial. Slicehost eventually came up with a neat solution towards the same end: they were oversubscribed, so they sorted their waiting list by the amount of non-refundable deposit you were willing to make, giving them much-needed cash flow without committing them to service for forever.