Ask HN: A large community owner is trying to strong-arm us. What should I do?

If you issued a full refund, you are not obligated to do anything more for them. You already accepted responsibility by issuing a full refund even though the IRS delays are unprecedented and your client needs to understand that. I would say "We are happy to continue the work but we need to re-establish formal relationship again through a new contract/payment in order to ensure we are able to provide quality service to you".

If they don't like it, you can tell them to go somewhere else politely unless you are at their mercy and begging for their business. A client that takes a full refund AND then still expects free work is not a client you want to work for. They will continue to make your life worse.

Thanks for the input! I am trying to see how we can solve this. I offered a $200 discount (our total price was $599) and they were still not ready to accept.

You need to add in a 'force majeure clause' to your contracts.

The IRS issue was not your fault. There was NOTHING you could do about it. EIN number, was probably the easiest part of setting up the company. Value ... maybe a 10% refund.

I think your taking the blame, was not a good business practice. Explain what happened, offer a discount, or offer a logo, or cancel everything (eating expenses, but not giving it away free).

Write this off as a lesson learned.

I completely agree with this. Taking 100% blame for something you had 0% control over was a bad move. Your intentions were good but as sloaken said “maybe a 10% refund”.

The issue you have now is that this client has been trained to walk all over you and expect everything they ask for. Not too dissimilar to that of a dog that learns to cry for table scraps.

The bottom line is that your clients come to you because they need you as much, if not more than, you need them. You don’t have to throw it their face but it’s extremely useful to remind yourself of it from time to time as it will help you take up for yourself when, and hopefully before, these types of situations arise.

If the premise of your company is to make it easier for people to start a company, I'd say just do this one for free. If they tell others that it was a still a lot of back and forth then it people might not think that it's worth the extra money to start the company. I set up my own LLC and it was really pretty cheap and easy (the sales tax system is another story).

If you promised it deliver it.

you're not getting paid because you offered to do it for free. chalk it up as a life lesson. sales 101.

going forward, you need to position your service for what it is. Dealing with government BS so the client doesn't have to. and set that expectation early there will be problems but that's what your there to deal with(for a price). You need to explain how much pain and frustration your saving them.

And if they can't appreciate what you are doing for them you need to find other customers.

I know one thing I would like a button to close a company down. I still get letters from the state from all kinds of agencies I have know idea about. quarterly reports I didn't file.

Thanks for the input. We are trying to figure this out now. It should be easy to start a company, but more easier to close one down.

Yes, keeping a note for future. When we accepted the order, EIN was a 3-4 day process and suddenly everything went chaos with the covid impact. But surely a lesson managing expectations.

I know this is obvious, but it's important to look at your online agreement or terms of service for customers to see what they've agreed to.

If you're not legally culpable, I don't see the reason for the refund. The fact is most people, especially in the US, will understand that delays caused by the government's servers are not at all unusual, and they might just side with you. Perhaps you're concerned about social dislikes before you've even gotten your startup off the ground. I find communication is really the most important thing; if there are few enough customers to contact, I'd call every one of them; it may see like a waste of time, but they're really key to your business, and having the founder contact them may bring tears to their eyes.

We are dealing with human beings, and so-called disasters could be turned around to super-power you. Remember that Intel's biggest growth was when there was a rare problem with their pentium chip, and they fixed and returned every one, and made a huge marketing campaign around it; if you have already refunded, you should make sure to let everyone know about it, and reach out to customers, perhaps via email directly. Testimonials are a really big deal in the social world, and every one of them could be your biggest advocate for lots of new customers.

Regarding what you're apparently most worried about, the bigshot late stage startup, that wouldn't be a concern to me. Some bigshot, who can't afford an EIN number; rmember what YC awards on here, it's called karma, and it goes around. If they try to injure you, they may have a lot more to worry about when you tell your side of the story, especially if they are bigger.

Let me tell you a true story that happened to me just today. I had an investor on my podcast some weeks ago. This person seems really nice, and has a huge social following, so I offered something that really goes against the way we operate, to do some free legal work for this person, so they could view our work, and if they were satisfied, to establish a regular working relationship together.

A few weeks later, this person reached out to take me on my suggestion (and was actually mad that I hadn't contacted the person earlier, but apparently the email had ended up in spam) and not only did we do the work namely fixing a really bad contract bringing a ray of sunshine to it (sorry for the braggadocio), and they kept all the changes, but I did a full video of explanation for this person and their partner.

Yesterday, they reached out to me again, this time stating that we could work together but that their partner is cheap, so watch the fees, then telling me how much we could charge, and when we mentioned our customary retainer for this sort of work, refused but did mention they needed the work done right away.

My response was to say sorry, we can't do it, and send them a polite email, and fortunately as founder like you I don't have to answer for it. I'm just letting you know about own experience, acquired over decades.

This is my hugely wordy way of saying to stay away from time wasters, big-shots or otherwise, and put your time into what counts. I've seen lots of folks like this, and all they do is waste your time, because you've got finite time, and let it be spent with the good customers, who love you and want to work with you. The 'big shot's' power is mostly a perception, and most people are fair minded. Don't give into it.

My only caveat is that I don't know the exact circumstances and I'm taking your word for it.