<h1>DreamHost AI Agent: Subscription Model Plan Options</h1>
------------------------------

## Abstract
This document outlines potential subscription plan options for the DreamHost AI Agent product. It explores key parameters to inform strategic decision-making and ensure a successful product launch.

Based on [Competitors Analysis [DreamAgent AI]](https://hackmd.io/ydkVzxVaTYaNVihM39tPdg)

**Parameters:**

1. **Potential audience:** Analyze the size and characteristics of the target audience within the DreamHost customer base.
2. **Feature set:** Define a tiered feature set for different subscription plans, catering to varying customer needs and price points.
3. **Implementation cost:** Estimate the costs associated with developing and deploying each plan's features.
4. **Implementation time:** Project the time required to implement each plan's features and make them market-ready.
5. **Return on investment (ROI):** Forecast the time it will take to recoup the investment for each plan.
6. **Profitability:** Model potential profit margins for each plan based on projected subscriber numbers and pricing.
7. **Support cost:** Estimate the ongoing support costs associated with each plan, including customer service and maintenance.

## About the DreamHost AI Agent

The DreamHost AI Agent is an embeddable tool for customer websites, enabling visitors to interact with an AI assistant pre-trained on the site's data and additional documents provided by the customer (such as links or text files). It answers visitor questions, and if responses are not helpful, customers can review and manage these cases.

**Key Benefits for DreamHost Customers:**

* **Seamless Integration:** Installs easily as a WordPress plugin directly from the DreamHost panel, ensuring smooth deployment.
* **Easy Setup and Use:** Designed for simplicity, requiring no advanced technical knowledge.
* **Enhanced Customer Engagement:** Provides instant answers to visitor inquiries, improving user experience and satisfaction.

**Target User Personas:**

* Website owners looking to boost visitor engagement.
* Businesses aiming to offer immediate customer support on their sites.
* Users seeking an effortless AI solution without complex setup.

**Competitive Advantages:**

* **Unique Hosting Integration:** Direct integration with DreamHost's hosting platform simplifies management.
* **Customization:** Ability to train the AI on specific website content and customer-provided documents.
* **User-Friendly Installation:** Quick and straightforward setup reduces barriers to adoption.

## Competitor Analysis Recap

We analyzed four key competitors to inform our pricing strategy for the DreamHost AI Agent:

**1. Fini AI**

* **Overview:** Small to mid-sized company with a fully functional support dashboard.
* **Pricing:**
* Starter Plan (GPT-3.5 Turbo): $4.80/month for 50 messages. Low initial profit, increasing over time.
* Growth Plan (GPT-4o Mini): $2,950/month for 5,000 messages. High profitability.
* **Profit Margins:** Good due to one-time embedding costs.

**2. EmbedAI**

* **Overview:** Creates AI chatbots powered by ChatGPT, linked to Vadoo (AI video generation).
* **Comments:** Suboptimal implementation quality, poor Vadoo video output.
* **Pricing:**
* Basic Plan (GPT-3.5 Turbo): $19/month for 2,000 messages. Moderate profits.
* Advanced Plan (GPT-4 Turbo): $99/month for 10,000 messages. Substantial profits.
* **Profit Margins:** Increase over time after initial embedding.

**3. Tidio (Lyro AI)**

* **Overview:** Global leader in customer service software, uses Claude (Anthropic AI).
* **Pricing:** $39/month for 50 conversations (up to 20 messages each).
* **Profit Margins:** Significant, with embedding costs decreasing over time.

**4. Botsonic (by Writesonic)**

* **Overview:** AI chatbot from a well-funded AI content platform.
* **Pricing:**
* Starter Plan (GPT-4o Mini): $19/month for 1,000 messages + $49/month for branding removal. Good profitability.
* Advanced Plan (GPT-4o): $299/month for 12,000 messages + $49/month for branding removal. High profitability.
* **Profit Margins:** Good, with higher initial embedding for larger data limits.

## DreamHost Agent AI

### Option 1 (Lazy Bob)

This approach targets non-experts who want a product that solves basic, “level 0” customer support problems. The focus is on simplicity and affordability.

**NOTE**: This approach focuses on minimizing customer effort while providing AI's value. Live chat and advanced technical support features are intentionally excluded, reducing costs.

### Core Features of the Basic Product

1. **AI Agent Widget** (embedded on the user’s website)
2. **AI Agent Dashboard** (accessible through the DreamHost panel)

#### DreamHost Panel > AI Agent Dashboard ([panel.dreamhost.com/ai-dashboard](panel.dreamhost.com/ai-dashboard))

##### Marketing Page
- Clearly explain the benefits of using the AI bot for “level 0” support.
- Highlight how unresolved “level 0” issues can be addressed through the dashboard on “level 1.”

##### Add AI Agent Flow
- Allow customers to add a new agent by providing initial configurations and the target website URL.

##### List of Agents
- Display a list of the customer’s created agents.
- Show the available capacity (e.g., number of messages).

##### AI Agent Configuration

###### Widget Customization
- Enable customers to adjust widget images, colors, and fonts to match their website’s design.

###### AI Settings
- Provide options to select the AI model and configure settings.

##### AI Knowledge
- Allow customers to manage the information the AI learns from (AI knowledge base).
- Adds first scan of "customre-website.com" crawling pages content.
- Enables user to add/remove "urls" that crawler extract content from.
- Enables user to upload/remove files ".txt, .csv, .pdf, .docx"
- Enables user to add/remove text via simple input

##### AI Inbox
- Display all AI interactions in an organized view.
- Allow customers to add questions and answers to the knowledge base directly.

##### AI Case
- Provide tools to handle callback requests and monitor the status of cases.

##### AI Preview
- Provide tools to handle callback requests and monitor the status of cases.

#### DreamHost Panel > AI Agent Widget ([customer-website.com](customer-website.com))

---

### DreamHost Panel > AI Agent Widget ([customer-website.com](customer-website.com))

#### Widget Features
- **Customer Interaction:** Visitors to the customer's website can interact with the AI Agent to ask questions related to the website and its products.
- **Support Ticket Submission:** Visitors can leave a support ticket with callback information for further assistance.

---

### DreamHost AI Agent Monetization Strategy

#### Subscription Model

Reasonable apporoach here to create subscriptions with different limitations that insentivise customre to upgrade.

As additional sourse of revenue we can add brended `Powered by DreamHost` tag, that customer able to remove for additional $$/mo.

#### DreamHost AI Agent [Starter Plan]

##### Open AI Pricing

https://openai.com/api/pricing/

GPT-4o Mini Pricing:
  $0.15 per 1,000,000 input tokens (standard)
  $0.6 per 1,000,000 output tokens (standard)

Text Embedding Small:
  $0.020 / 1M tokens

File Search:
  $0.10 / GB of vector-storage per day (1 GB free)

##### Message Size Limit

Baised on marketing analysis `Starter Plan` should cost about $10/mo per about 1000 message/mo.
And `Knowladge` should be included and have about 10MB of data.

By setting limitation to amount of tokens we allow visitor to spend per message, we able to set upper limit we going to pay to `Open AI` per message and apply margine.

Setting message limitation:
- input to 1000 tokens (~4000 english characters)
- output of 500 tokens (~2000 english characters)

##### DreamHost Pricing

1000 of this limited messages whould const DreamHost $0.45 on OpenAI GPT-4o Mini

We able to set starter price $9.99/mo for 1000 messages. (marging +2100%)
+ add additional 1000 messages for $10.00 (marging +2100%)
+ add additional **x** messages for ($10.00***x**) (marging +2100%)

DreamHost     Starter         $0.00999  1 message  // 1000 message per $9.99
OpenAI        GPT-4o mini     $0.00045  1 message  // 1000/1000000 * 0.15 + 500/1000000 * 0.6
---------------------------   ------------------------------------------------
1000 messages
monthly DreamHost            +$9.99      1000 message
monthly OpenAI               -$0.45      1000 message (max messages size 1000 in and 500 out)
---------------------------   ------------------------------------------------
10MB knowladge
OpenAI Embed [Vector DB]     -$0.02621   10MB is about 5,242,880 characters (avg. 1 token per 4 chars)
                                         1,310,720 tokens $0.020 / 1M tokens
---------------------------   ------------------------------------------------
Profit
month 1 DreamHost              $9.51     (if full DreamHost limits totaly used in each conversation)
---------------------------   ------------------------------------------------

**NOTE:** Optional paid plugins:
1) Remove `Powered by DreamHost` tag for +$10
2) One full knowladge Auto Sync per month +$5 (margin +18976%)

---
#### DreamHost AI Agent [Grow Plan]

##### Open AI Pricing

https://openai.com/api/pricing/

GPT-4o Mini Pricing:
  $0.15 per 1,000,000 input tokens (standard)
  $0.6 per 1,000,000 output tokens (standard)

Text Embedding Small:
  $0.020 / 1M tokens

File Search:
  $0.10 / GB of vector-storage per day (1 GB free)

##### Message Size Limit

Baised on marketing analysis `Grow Plan` should cost about $50/mo per about 7000 message/mo.
And `Knowladge` should be included and have about 50MB of data.

By setting limitation to amount of tokens we allow visitor to spend per message, we able to set upper limit we going to pay to `Open AI` per message and apply margine.

Setting message limitation:
- input to 1000 tokens (~4000 english characters)
- output of 500 tokens (~2000 english characters)

##### DreamHost Pricing

7000 of this limited messages whould const DreamHost $3.15 on OpenAI GPT-4o Mini

We able to set Grow Plan price $49.99/mo for 7000 messages. (marging +1480%)
+ add additional 7000 messages for $50.00 (marging +1480%)
+ add additional **x** messages for ($50.00***x**) (marging +1480%)

DreamHost     Grow            $0.00714  1 message  // 7000 message per $49.99
OpenAI        GPT-4o mini     $0.00045  1 message  // 1000/1000000 * 0.15 + 500/1000000 * 0.6
---------------------------   ------------------------------------------------
1000 messages
monthly DreamHost            +$49.99      7000 message
monthly OpenAI               -$3.15       7000 message (max messages size 1000 in and 500 out)
---------------------------   ------------------------------------------------
50MB knowladge
OpenAI Embed [Vector DB]     -$0.13107    50MB is about 26,214,400 characters (avg. 1 token per 4 chars)
                                          6,553,600 tokens $0.020 / 1M tokens
---------------------------   ------------------------------------------------
Profit
month 1 Botsonic              $46.70     (if full DreamHost limits totaly used in each conversation)
---------------------------   ------------------------------------------------

**NOTE:** Optional paid plugins:
1) Remove `Powered by DreamHost` tag for +$10
2) One full knowladge Auto Sync per month +$10 (margin +7592%)

---

#### DreamHost AI Agent [Business Plan]

##### Open AI Pricing

https://openai.com/api/pricing/

o1-mini Pricing:
  $3 per 1,000,000 input tokens (standard)
  $12.00 per 1,000,000 output tokens (standard)

Text Embedding Small:
  $0.020 / 1M tokens

File Search:
  $0.10 / GB of vector-storage per day (1 GB free)

##### Message Size Limit

Baised on marketing analysis `Business Plan` should cost about $200/mo per about 10000 message/mo.
And `Knowladge` should be included and have about 100MB of data.

By setting limitation to amount of tokens we allow visitor to spend per message, we able to set upper limit we going to pay to `Open AI` per message and apply margine.

Setting message limitation:
- input to 1000 tokens (~4000 english characters)
- output of 500 tokens (~2000 english characters)

##### DreamHost Pricing

10000 of this limited messages whould const DreamHost $90 on OpenAI o1 mini

We able to set Business Plan price $199.00/mo for 10000 messages. (marging +120%)
+ add additional 10000 messages for $200.00 (marging +120%)
+ add additional **x** messages for ($200.00***x**) (marging +120%)

DreamHost     Starter         $0.0199  1 message  // 10000 message per $199.00
OpenAI        GPT-4o mini     $0.009   1 message  // 1000/1000000 * 0.15 + 500/1000000 * 0.6
---------------------------   ------------------------------------------------
1000 messages
monthly DreamHost            +$199.00      10000 message
monthly OpenAI               -$90.00       10000 message (max messages size 1000 in and 500 out)
---------------------------   ------------------------------------------------
100MB knowladge
OpenAI Embed [Vector DB]     -$0.26214   100MB is about 52,428,800 characters (avg. 1 token per 4 chars)
                                         13,107,200 tokens $0.020 / 1M tokens
---------------------------   ------------------------------------------------
Profit
month 1 DreamHost             $108.73    (if full DreamHost limits totaly used in each conversation)
---------------------------   ------------------------------------------------

**NOTE:** Optional paid plugins:
1) Remove `Powered by DreamHost` tag for +$10 (free)
2) One full knowladge Auto Sync per month +$50 (margin +18973%)

### Implementation time and cost

**NOTE**: Approximate calculations

#### DreamHost Panel > AI Agent Dashboard

##### Marketing Page
- 1 x Designer (2 weeks)
- 1 x Front-End Developer (2 weeks)

##### Add AI Agent Flow
- 1 x Designer (3 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (4 weeks)

##### List of Agents
- 1 x Designer (3 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (4 weeks)

#### AI Agent Configuration

###### Widget Customization
- 1 x Designer (1 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (4 weeks)

###### AI Settings
- 1 x Designer (1 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (4 weeks)

##### AI Knowledge
- 1 x Designer (2 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (12 weeks)

##### AI Inbox
- 1 x Designer (2 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (4 weeks)

##### AI Case
- 1 x Designer (1 weeks)
- 1 x Front-End Developer (4 weeks)
- 1 x Back-End Developer (4 weeks)

##### AI Preview
- 1 x Designer (1 weeks)
- 1 x Front-End Developer (2 weeks)
- 1 x Back-End Developer (2 weeks)

#### Recomended size of the team:

- 1 x Project Manager (19 weeks)
- 1 x Tech Lead (19 weeks)
- 2 x Designer (8 weeks)
- 2 x Front-End Developer (16 weeks)
- 2 x Back-End Developer (19 weeks)
- 1 x QA Tester (19 weeks)

#### Approximate implementation time:

19 weeks or 9.5 sprints it's 5 month +20% for unknowns.

**TOTAL**: 6 month (12 sprints)

#### Approximate implementation cost (6 month):

- 1 x Project Manager (19 weeks)          $27,000.00 
- 1 x Tech Lead (19 weeks)                $45,000.00
- 2 x Designer (8 weeks)                  $34,200.00
- 2 x Front-End Developer (16 weeks)      $57,000.00
- 2 x Back-End Developer (19 weeks)       $68,400.00
- 1 x QA Tester (19 weeks)                $15,000.00
-----------------------------------------------------
TOTAL                                    $246,600.00

### Return on Investment (ROI)

The Return on Investment (ROI) for the DreamHost AI Agent is recalculated based on the updated implementation costs and the projected revenue, operational expenses, and customer acquisition targets.

---

#### **Implementation Cost** (One-Time)
- **Total Development Cost**: **$246,600.00**

#### **Operational Costs** (Monthly)
1. **AI Costs**:
- Starter Plan: 2,000 customers x $0.45 = **$900/month**
- Grow Plan: 1,200 customers x $3.15 = **$3,780/month**
- Business Plan: 800 customers x $90.00 = **$72,000/month**
- **Total AI Costs**: **$76,680/month**

2. **Vector Storage Costs**:
- Starter: 2,000 x $0.02621 = **$52.42/month**
- Grow: 1,200 x $0.13107 = **$157.28/month**
- Business: 800 x $0.26214 = **$209.71/month**
- **Total Storage Costs**: **$419.41/month**

3. **Operational Team Costs**:
- Support and Maintenance: **$15,000/month**

**Total Monthly Operational Costs**:
$76,680 (AI) + $419.41 (Storage) + $15,000 (Team) = **$92,099.41/month**

#### **Yearly Operational Costs**:
$92,099.41 x 12 months = **$1,105,192.92/year**

---

### **Revenue Projection**
#### **Total Paying Customers by Month 12**: 4,000 customers (1% of the target audience of 400,000)

#### **Plan Distribution**:
- **50% on Starter Plan**: 2,000 customers at $9.99/month
- **30% on Grow Plan**: 1,200 customers at $49.99/month
- **20% on Business Plan**: 800 customers at $199.00/month

#### **Optional Add-ons**:
- **Remove Powered by DreamHost Tag**: $10 x 20% of 4,000 = **$8,000/month**
- **Knowledge Auto Sync**:
- Starter: $5 x 20% of 2,000 = **$2,000/month**
- Grow: $10 x 20% of 1,200 = **$2,400/month**
- Business: $50 x 20% of 800 = **$8,000/month**

#### **Total Monthly Revenue**:
- Starter: $9.99 x 2,000 = **$19,980**
- Grow: $49.99 x 1,200 = **$59,988**
- Business: $199.00 x 800 = **$159,200**
- Add-ons: $8,000 (Tag Removal) + $12,400 (Sync) = **$20,400**

**Total Monthly Revenue**: $19,980 + $59,988 + $159,200 + $20,400 = **$259,568**

#### **Yearly Revenue**:
$259,568 x 12 months = **$3,114,816.00/year**

---

### **ROI Calculation**
1. **Net Revenue (Yearly)**:
- Total Revenue: **$3,114,816.00/year**
- Operational Costs: **$1,105,192.92/year**
- **Net Revenue**: $3,114,816.00 - $1,105,192.92 = **$2,009,623.08/year**

2. **Payback Period**:
- Implementation Cost: **$246,600.00**
- Monthly Net Profit (Month 12): $259,568 - $92,099.41 = **$167,468.59/month**
- **Payback Period**: $246,600.00 / $167,468.59 ≈ **1.47 months**

3. **ROI Percentage**:
- ROI = (Net Revenue / Total Costs) x 100
- Total Costs = Implementation Cost + Operational Costs = $246,600.00 + $1,105,192.92 = $1,351,792.92
- ROI = ($2,009,623.08 / $1,351,792.92) x 100 ≈ **148.6%**

---

### Summary
- **Total Yearly Revenue**: **$3,114,816.00**
- **Total Yearly Operational Costs**: **$1,105,192.92**
- **Net Revenue (Yearly)**: **$2,009,623.08**
- **Implementation Payback Period**: ~1.47 months
- **ROI**: **148.6%**

The updated ROI reflects the higher implementation costs but maintains a strong financial performance and rapid payback period. Let me know if further adjustments are needed!