Business Model
Pricing Philosophy
Core Principle: Generation is FREE. Infrastructure is where we add value.
Our N-gram statistical engine costs ~$0.0000001 per record (CPU cycles only), while LLM-based competitors cost $0.001-$0.10 per record. This 10,000x cost advantage lets us offer truly unlimited generation—something competitors literally cannot match.
Why This Works
| Aspect | LLM-Based Competitors | Phony |
|---|---|---|
| 100K records | $100 - $10,000 cost | $0.01 cost |
| 1M records | $1,000 - $100,000 cost | $0.10 cost |
| Can be unlimited? | ❌ No (cost floor) | ✅ Yes |
| Speed | ~10 records/sec | 100K+ records/sec |
| Deterministic | ❌ No | ✅ Yes |
Result: We charge for infrastructure (DB connections, API endpoints, storage, features), not for data generation or users.
Competitive Positioning
| Competitor | Pricing Model | At Scale |
|---|---|---|
| Tonic Structural | $199/mo + $19/table | $$$ expensive |
| Tonic Fabricate | $10 credits/mo | ~100-1000 records only |
| Gretel.ai | 15 credits/mo + $2/credit | Credit-based |
| Phony Cloud | $29-$199/mo FLAT | UNLIMITED generation |
Pricing Tiers
| Tier | Price | Best For |
|---|---|---|
| FREE | $0 | Evaluation, side projects |
| STARTER | $29/mo | Individual developers |
| TEAM | $79/mo | Small teams |
| BUSINESS | $199/mo | Growing companies |
| ENTERPRISE | $500+/mo | Large organizations |
★ ALL TIERS: UNLIMITED GENERATION + UNLIMITED USERS (except FREE) ★
📋 Complete Feature Matrix: See Pricing for the full breakdown.
Quick Comparison
| Feature | FREE | STARTER | TEAM | BUSINESS |
|---|---|---|---|---|
| Generation | ★ Unlimited | ★ Unlimited | ★ Unlimited | ★ Unlimited |
| Users | 1 | ★ Unlimited | ★ Unlimited | ★ Unlimited |
| Sync Jobs | 1 | 5 | 15 | Unlimited |
| Endpoints | 5 | 30 | 150 | Unlimited |
| Snapshots | 3 | 10 | 50 | Unlimited |
| CI/CD | ✗ | ✗ | ✓ | ✓ |
| SSO | ✗ | ✗ | ✗ | ✓ |
Revenue Projections
Target: $600K ARR
| Tier | Price | Customers | Monthly |
|---|---|---|---|
| Free | $0 | 5,000 | $0 |
| Starter | $29 | 300 | $8,700 |
| Team | $79 | 150 | $11,850 |
| Business | $199 | 60 | $11,940 |
| Enterprise | $800 | 20 | $16,000 |
| Total | 530 paid | $48,490/mo |
Annual: ~$582K ARR → Path to $600K+ with natural tier upgrades.
Unit Economics
| Metric | Target |
|---|---|
| Blended ARPU | ~$94/month |
| Free-to-Paid Conversion | 8-10% |
| CAC (PLG model) | $200 |
| LTV (24 months) | $2,256 |
| LTV:CAC Ratio | 11.3x |
| Monthly Churn | < 4% |
| Net Revenue Retention | > 100% (tier upgrades) |
Gross Margin
| Tier | Margin |
|---|---|
| Starter ($29) | ~85% |
| Team ($79) | ~80% |
| Business ($199) | ~75% |
| Enterprise | ~70% |
Revenue Timeline
| Year | ARR Target | Customers | Notes |
|---|---|---|---|
| 1 | $30-50K | 15-30 | Validation |
| 2 | $100-150K | 50-80 | Product-market fit |
| 3 | $300-400K | 150-200 | Growth |
| 4 | $600-800K | 300-400 | Exit-ready |
| 5 | $800K-1M | 400-500 | Exit window |
Exit Valuation
| Scenario | Calculation |
|---|---|
| Conservative | $600K × 5x = $3M |
| Base | $800K × 6x = $4.8M |
| Optimistic | $1M × 8x = $8M |
Why This Pricing Wins
vs Tonic Fabricate (LLM-based)
| Scenario | Tonic Fabricate | Phony |
|---|---|---|
| 100 records/mo | ✓ (within credit) | ✓ Unlimited |
| 10K records/mo | $100+ overage | ✓ Unlimited |
| 1M records/mo | $10,000+ | ✓ Unlimited |
vs Tonic Structural (DB Sync)
| Tables | Tonic Structural | Phony |
|---|---|---|
| 20 | $199 base | $29-79 |
| 50 | $769 | $199 flat |
| 100 | $1,719 | $199 flat |
The Message:
"Generate a million records or a billion. The price doesn't change."