Does it strike anyone else as weird that one of the two costs driving them out of business was the licensing costs of a font? Jeez man, I think good design is important too but make a compromise somewhere.
Also, fixed cost sales vs unbounded maintenance costs is just a doomed business model from the start.
It doesn't surprise me only because I've followed Gruber's blog over the years: he's a typography and font geek in the same way that many of us are tech geeks. The use of a licensed font was a design conceit on his part but hardly fatal at $300/yr. The ~$3,600/yr for servers seems pretty high for what they're doing, but again far from fatal. What likely doomed them was that the market of discerning customers is much smaller than they estimated (yes, even in the Apple ecosystem) combined with a large number of competitors (especially at the crucial price of 'free'.)
Expenses didn't drive them out of business, the lack of revenue did. Sure, they could have switched to a free/built-in font and saved $300 and maybe switched to a cheaper hosting provider and maybe saved $1-2k... then what? At best they're now keeping an additional $1-2k per year (split 3 ways), for now, from an app that they need to keep running on the platform and backend services to keep going 24x7... there's better ROI to be had working the drive through window at a local fast food restaurant.
Your point about one-time revenue vs. ongoing expenses is valid, but that can be fixed via new products / subscription pricing down the line. However, before that happened it sounds like they determined that they lacked the customer critical mass that would make it worth putting any more effort into it.
Yeah, I think that's what sat weirdly with me—the article felt like a 'it was bleeding me dry!' kind of thing, but I have a hard time seeing how that could be the case with those kinds of expenses. It feels more like a "this isn't fun anymore" kind of shutdown.
So that doesn't seem like a show-stopping kind of cost to me... Its not nothing, but does point to the sync server being the main cost there. Wonder what the pricetag on that was.
Also, fixed cost sales vs unbounded maintenance costs is just a doomed business model from the start.