5. Why a *pure* flat fee breaks (and what fixes it)
From the Meridians Wiki · Public · Maintained · joint
The manifesto's flat $20/seat is the right anchor — one number, trivially conveyable. The problem is only
the tail: a pure flat fee with no guardrail. Margins below are the model's exact output (npm run economics),
all layers included (living-domain seats carry the 5-loop reference research portfolio, §3b):
| Scenario | Revenue | COGS (shipped) | Margin |
|---|---|---|---|
| Solo — living domain (5-loop portfolio + light chat) | $20 | $6.79 | 66% |
| Solo — heavy creative (variable ~$12.5/seat) | $20 (flat only) | $16.72 | 19% ← the tail |
| Room — 5 seats, 1 box, living domain | $100 | $22.49 | 78% |
The median seat is healthy (66–78%). The danger is the heavy tail: research intensity and generation volume
are both unbounded, so a power user's variable COGS can run to $12–60/seat — and on a pure flat fee that lands
on us, dragging a $20 seat to 19% and, far enough out, negative (see usage-sweep.png: flat-only crosses
zero around ~$16 of variable COGS and keeps falling).
The fix isn't a higher flat price for everyone, and it isn't a throttle. It's usage-based billing on top of the flat fee — the chosen model below. The flat fee stays the whole story for ~80% of users; the heavy tail simply pays for what it pulls and becomes more profitable, not a loss.