soupsoup:

Muxtape too expensive to run?

A tipster tells us Muxtape investor Jakob Lodwick has been heard to complain that the site’s hosting bill alone amounts to $30,000 per day. That figure seems high — could our tipster have misheard Lodwick saying the bill is $30,000 a month? After Muxtape’s first day, Ouellete posted the site’s stats, reporting 8,685 users uploading and playing 19,731 songs over 35,000 visits cost Muxtape $118.17 with Amazon’s S3 online-storage service. Extrapolate that first day over a month, at Amazon’s standard rates, and you’ve got a $3,545 hosting bill. Compete.com confirms that Muxtape’s user base has grown at least tenfold since then, making a $30,000/mo. hosting bill not just plausible, but likely.

The bill is also far more than Lodwick or Ouellette seem to have expected. In an accidentally published investment term sheet, Ouellette estimated three months of hosting would cost $18,000. That’s about $72,000 off the mark, enough to eat through Lodwick’s $95,000 investment and shut down the site, angry letters from the RIAA or no.

via Valleywag

First, or maybe it’s the second, thing they teach you in Business School. Make sure you map out your investment term sheet on each other’s foreheads so that someone responsible can take a look at it. Dopes.