In Defense of Chargify | Hacker News Reader

In Defense of Chargify

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20 pointsdamoncali9 comments

  Chargify was underpriced.

Unless you have some inside information, it's hard to say if they were undercharging for their service. Without knowing what their overhead was like I don't think it's fair to say that the service was underpriced. Just because they can charge a lot for something doesn't mean they should.

One would hope they would have been able to sustain the free tier based on the revenue from the paying tiers so that they could sustain the free tier in the hopes that many of them would become paying customers.

On twitter, however, they claimed this change was a move to get rid of accounts where users had paying customers but weren't actually paying chargify yet. This would have been fine, but they also doubled prices for anyone who had between 50 and 500 customers and raised the prices for the other tiers as well. Their explanation doesn't match with their actions.

  Chargify offers great service.

In my experience it was really just mediocre service. While I give them credit for trying, It seemed like Lance was handling a lot of the support himself and to his own admission he's not a technical support person. There were a couple of times he just sent my partner links to the documentation without actually answering a question. No offense to Lance or anything, but it was clearly a good idea to hire a technical support person. The only problem is, now that I'm fully integrated, I don't really need help / support unless their service goes down or something breaks.

  Chargify has been very transparent.

Only after the fact. Sure, they get a couple of points for that but I still wouldn't consider this a good thing.

  You must do your own due diligence

Do you often ask a service if they are going to raise their prices any time soon before you sign up? Do you think they would have said yes if I had asked them 6 months ago? Honestly, I thought $49/month was a pretty fair price and didn't really expect it to change any time soon. I looked at all of the options out there and felt like chargify offered the best service at the best price. Would you consider me foolish?

The bottom line is that they offer a great product but it still needs some work. Doubling what I pay for it really broke my trust and if they don't fix some of the issues with the product soon, I'll be writing my own solution.

Are there any other SaaS alternatives to Chargify?

I was planning on implementing it into my app next week but I'm having doubts now with the price. There is no entry level option any more. For an app that is prerevenue, the up to 50 for free account was very compelling.

Now I'm required to pay $99 upfront regardless.

I may write my own as well. There's quite a few rails frameworks.

There's a really detailed breakdown here:

http://www.untitledstartup.com/2010/02/accepting-payments-on...

Spreedly, Recurly, and Cheddargetter are the three most often mentioned as alternatives.

If you want help setting up CheddarGetter, we'll walk you through the process. CG also has its own gateway (CheddarGateway) so that's one less thing you have to worry about.

We'll also walk you through setting up a merchant account, which can be a bit mind-bending.

team@cheddargetter.com

  Unless you have some inside information, it's hard to say if they were undercharging for their service. Without knowing what their overhead was like I don't think it's fair to say that the service was underpriced.

Why should they charge their customers some kind of fair margin over their costs? If they save a customer $2000 of development time/effort/risk and charge them $99 per month, what does it matter if their costs are $10, $100 or $1000? Knowing whether or not I'm getting $99 of value from them does not in any way depend on knowing anything about their costs (other than being sure that their costs are covered so I won't have an emergency on my hands when they go belly-up).

  Just because they can charge a lot for something doesn't mean they should.

If that maximizes their profit, it kind of does, IMO. I think that far too many startups are underpricing their offering rather than overpricing.

Disclaimer: I'm not a customer of theirs and hadn't even heard of them until yesterday.

At this point, this is the way I feel. At their price point, Chargify is a useful tool to get off the ground quickly but not quite as useful as a long term solution. At your example of $2000 for the development of a billing system, Chargify is only viable for a short period of time. At $49/month that wasn't so bad. Now, at $99/month I think it's overpriced for that purpose.

I look at it this way: most startups have more than enough work, and not enough hours in the day to accomplish it all and therefore should be concentrating on solving the things that are absolutely core/critical to their product/service. Those are the things that your customers find valuable (and will give you money for).

Anything that's "undifferentiated slog" that you sort of have to do in order to exist, but that your customers don't give a fig about should be eliminated, reduced, outsourced or purchased if that saves you time to spend on what they do care about. Are you selling the box or the chocolates: http://forio.com/resources/article/the-pitfalls-of-outsourci... ?

Could it be that Chargify's troubles in finding clients are caused by lack of demand for flexibility in payment system? It's one thing to dream about having sophisticated and flexible payment system. It's another thing when such flexible system is offered to paying customers.

Customers don't like to navigate across gazillion payment plans and generally prefer simple and stable payment options.

My guess is that companies that play with pricing too much -- do not have long-term success and therefore cannot really grow and support Chargify.

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