> Further, cloud companies will probably be resistant to a service like yours because it will negatively impact their margins.
I should mention that we've been approached by a number of cloud providers who want to be included in our system. We currently support AWS, Microsoft Azure and Rackspace.
It sounds from your previous comments that you are a traffic acquisition play for these providers. You do the leg work and bring them customers, and for that they give you a cut of the action.
Its not a bad place to be, but it isn't necessarily a 'viable' place to be. For each customer you bring to them, how much do you make initially? Does the customer come back to you or do they start dealing directly with the vendor? Who answers support calls? What happens during an outage, do you get paged or the underlying cloud vendor?
If you don't make a whole lot per customer you have to make it up in volume, and you have to be sure that you are not spending more to get to that customer than the customer pays you. If the customer can cut you out of the loop, you have to know when they are likely to do that and why (volume requirements? custom configurations? etc) and generate a way to predict their exit. That will give you insight into their 'lifetime value.' Finally you need to figure out what is the barrier, if any, to someone else being in your space and going after the same customers (is your offering unique? protectable? etc).
Once you know those things then you know what sort of revenue you can expect for 1 customers, 10 customers, and 10,000 customes, and what it might cost you to acquire 1, 10 or 10,000 and by subtracting the second number from the first number, you can figure out how much money you have to pay staff and for facilities, and if you subtract off that cost and the number you have left is positive, then that number, as a percentage of the number you started with, can tell you if this business of yours makes any sense at all. Greater than 15% you can live off it, greater than 50% and you'll be able to expand into adjacent markets, greater than 80% and you'll grow like Google or Microsoft in its early days.
This one's a flyer, I think, because the answers to these questions aren't very compelling:
-How novel is this? (sort of novel)
-What is proprietary about it? (inherently nothing)
-How high is the barrier to entry for competitors? (low)
-Who are your possible competitors? (the cloud services themselves AND other companies like you)
So the end game looks like this: either the big cloud providers make their own tools like yours and make you irrelevant, or one of them acquires you. That doesn't seem too investable to me.
I do think it's a perfect 3-5 person startup that you have a good chance of cashing out of, so don't take my post as criticism. As far as I can tell you need an advisor to help you with the "how do I make money" question more than you need an investment.
Assuming they are all paying you a percentage of sales, how big could it get?
Meaning, what is the largest you could see your revenue grow to?
With some paying customers it should be pretty easy to model your future revenue. Once you know the number you can estimate profit, then divide it by .1 to .2 to get an approximate exit market cap.
I should mention that we've been approached by a number of cloud providers who want to be included in our system. We currently support AWS, Microsoft Azure and Rackspace.