Comment by shazow | Hacker News Reader

Comment by shazow | Hacker News Reader

I hate the construct that you must be a business in order to make money. Not only that, but you must be a reasonably-successful business. Talk about a chicken and egg problem.

I'm trying to bootstrap a product that charges between $10-40/mo per user. Right now I have no users, but I hope to get a few over the next couple of months. What are my options?

Do I have to incorporate in order to get a merchant gateway? Do I cut my losses by using Chargify or Recurly and pay $30-40/mo while I am making less than half of that in revenue?

If I'm to remain economical, I'm forced to use Paypal (or Amazon's SimplePay, or Google Checkout) until I graduate to a better position with more customers.

I imagine a more efficient economy someday in the future when peer-to-peer transactions are commonplace and streamlined. Everyone should be able to provide a service or product in an ad-hoc nature before having to invest in incoporation, etc.

As much as I love to hate Paypal, I have to appreciate their forward thinking.

Just use PayPal, especially if you bootstrap.

Set up a recurring payments button and drop the HTML into a page. The IPN does the rest. Its simpler than you think:

http://blog.awarelabs.com/2008/paypal-ipn-python-code/

If within your first month of operation you have customers changing subscription plans then worry about how to deal with it.

Don't solve problems you dont have yet. If you don't have customers yet you've got more pressing concerns.

Having gone through this recently, Im hoping to save you pain.

I agree, that's what I ended up doing yesterday.

Intuit's GoPayment[1] service is a real merchant account and they take unincorporated sole proprietors. The basic service is free (it's positioned as a competitor to Square) and there's even "an app for that" on iPhone and Android. Their user interface leaves a little to be desired, but it is functional and there's a place for recurring payments to be handled (as long as you have authorization from the cardholder, of course).

My relationship with GoPayment: The co-op I help run uses them as an alternative to Square because GoPayment actually accepts EINs for incorporated entities. I'm just a satisfied customer.

1- http://gopayment.com/

I think you're taking bootstrapping to an extreme.

You should have at least a little bit of cash to burn (let's say $100 per month) until you get enough users to cover your costs.

one option would be to let your early users help you test things out for free.. with chargify, you can set up your site and everything in test mode, without paying for anything (I believe) as you work out the kinks. then you flip the switch to go from test to "live" when you feel you'll be able to cover the monthly fees.

Alternatively, you could do this, but charge your early customers via a simple Paypal recurring invoice until you're ready to turn on chargify.

Free is an option. You could also slap a big "Or Buy This Better Thing" button generated by PayPal somewhere on the signup page. Thats a better option.

Why?

Because, its a great way to A/B test if what you're hoping to sell will get traction even with one person.

Set the expectation for payment early, Dan Martell wrote a solid post on why this has worked for him in the past. If you give it away free with no expectations of payment, it de-values your product. So set the expectation of payment, slap a "Buy This" button ont there.

I sold 6 tea kettles once before knowing where to get them myself. I sent an email to 3 saying sorry were out of stock (fairly true). Then I searched the web for kettle distributors. Sent the email to other 3 asking if its ok if they are a few weeks late. All 3 sold, and several dozen since then. All from a Buy Now Button on a landing page.

I worry about the scenario of building something that people are unwilling to pay for. Also the service can get rather resource-intensive so I can't afford many free users.

I think Cheddargetter is friendly to bootstrappers - they have a free plan for up to 20 customers.

not that friendly. i applied to their special branded merchant account and was denied due to low volume.

Are you sure it was CheddarGetter that turned you down? I've also been denied but it was one of their supported payment gateways that denied me (even though I applied through CG).

Recently been thinking of changing to Chargify now that they support a payment gateway in Scandinavia. We (http://beaconpush.com, push service for Web Sockets) currently have our custom-built system for recurring payments. It works, but I really don't want to spend time hacking on it. I rather be focusing on our core business of developing our service.

yes, i'm certain. straight from the email:

"Unfortunately your transaction volume was too low to be approved for a merchant account at this time. "

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