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Comment by codegeek | Hacker News Reader

Plain and Simple. Charge from Day 1 and don't give stuff for free unless it absolutely makes sense. Also, keep costs low as much as possible. Don't get AWS if you can get a $5/Month DigitalOcean droplet. Don't spend money on ads etc. unless you know exactly HOW it works. Focus on building inbound marketing i.e. people finding you organically.

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Thanks! What if people say they want to try it for free? Do you say no?

Say you have a money back guarantee period (30 days seems reasonable), and if they push and you feel it's worth it still, offer to extend the money back guarantee period. If someone wants a thing but absolutely will not pay for it, that's typically resolved by them not getting it.

Hmm, is there a reason for NOT offering a guarantee?

I'm not aware of any good reasons, but I think GAAP standards say you can't recognize the revenue until the returns period ends? I think standard wisdom is to not have an official policy so as to keep the books simple (and maybe to avoid the downside I can't think of for returns periods) but use refunds pretty aggressively in support?

Your company should be on cash-basis accounting. Unless you have a need for accrual based. When you file corporate taxes, you list the method of accounting you are using.

Cash basis:

Cash in hand, recognized. Cash out, recognized.

Keeps it simple :)

Just to add to what @hawkice said already, you can offer them a money back period or offer a short free trial like for 7-10 days BUT take credit card upfront. Always take credit card upfront, period. If not, then you will get tons of tire kickers and time wasters. For bootstrapped, it will not be of too much use to you and may add unnecessary support time.

It is simple. I offer a 30 day money back guarantee. But if you cannot commit to credit card on day 1 knowing that you have nothing to lose, then you are not the customer I want.

Great insights. Why do some businesses have a free tier then? Does that only make sense if you're venture backed?

I would think so. Having a completely Free tier will surely get a lot more signups but how many of them convert. venture backed or well funded companies have the time and resource to handle free clients a lot more.

To add on the simplification, throw technology at the problem.

Research cloud services, compare prices, at the "cheap level", you can swap Digital Ocean for Vultr, OVH or even others (http://www.hostingadvice.com/reviews/vps/)

Throw more technology at it, find a PaaS that can rack docker instances (Flynn is my preferred one) and mount local versions of your expensive cloud services (Redis vs ElastiCache), (MariaDB vs Aurora), (Riak-docker vs S3). Every penny you save in your "infrastructure" setup can be put towards keeping the lights on.

You can run a company that makes $5,000 a month on $20 worth of Digital Ocean droplets (it's sketchy, but it can be done)

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