14 Days Later: What I’ve learned in the first 2 weeks of my startup
blog.doddcaldwell.com
blog.doddcaldwell.com
There are numerous Ask HNs about our demographics. Take a look at them. Compare with your domain expertise about people who run non-profits. The differences are fairly dramatic.
You'll never win an argument about pricing with someone who is not in the market for your product anyhow. Their opinions are not relevant. Getting $0 from HN readers will not compromise the success of your business, since there is no pricing strategy which will result in you getting more than $0 from HN readers.
I also think that 9.5% is less than 6% + 3.5% when considered from the perspective of the people whose opinions matter to you making your rent next month. For that matter, I think 10% would also also likely be perceived as less than 6% + 3.5%. In any event, you'll likely be additive on their existing revenue (or the customers will think you are), and 90% of free money is better than 100% of no money every day of the week.
You're correct - we are additive on the nonprofits' existing revenue (other than cases where they would be switching from another service). The problem that I seemed to be encountering in emails from prospective customers (actual nonprofits) was that it was psychological. Nonprofits are pressured to keep their Administrative and Fundraising expenses low. They tend to have a gut reaction when they see a percentage that's above 0%. They also tend to think about how much they could raise. When they think of it in very aspirational terms, the % seemed prohibitive.
Of course, I could be wrong on all of this. I've only been doing it for 2 weeks...
If that is true and you're finding that people are price sensitive, you should list your lowest price on the front page ("as low as 4 percent!"), and make it clear in the signup process that rates are higher at lower volumes. Ten percent is not a lot to pay at lower volumes considering you take care of payment processing and tech hosting, and merchant accounts at Paypal start around $30-40 USD per month, so someone will need to be collecting at least $500 a month before they come close to breaking even.
The cost (time, money, etc) of setting up their own website and processing their own transactions is obviously prohibitive, as most nonprofits don't accept online donations.
Lots of nonprofits also know exactly what percentages of their revenue go towards administration and marketing, so they're likely to have a good comparison point for how much it costs them to receive donations by other means.
I clicked over to your site, and your design blew me away. You really build authority with it, but also keep things fun, lighthearted, and modern.
A couple suggestions:
- You might want to test telling people they don't pay you fees after the first X they receive in monthly donations (around $1333, right? maybe make that an even $1000) as opposed to the maximum they pay you in fees. My marketing copywriting intuition tells me that may be clearer / more compelling than people having to do the math themselves. It also gives them a more tangible goal to shoot for and story to tell themselves. ("I'm sure we can get over $X a month, and the service is basically free after that!")
- Possibly test a more prominent mention of Facebook / Twitter integration on the front page (to the point that you don't have to click or mouseover to see it). I have a feeling that these features are pretty important to non-profits, especially ones who aren't savvy enough to have a good web presence yet. I'm not sure - again, probably I would just test it out.
Further, you could actually put forth why you disagree with him instead of taking his comment and applying an out-of-context switch with the subject. Comments and articles are completely different from a business on scale and intent (seriously, months to think about a comment? However I do re-read my comments to make sure they are sound, so maybe minutes). What I think you meant to say is that writing and sharing thoughts is okay no matter what stage you are at; in that I agree, but I disagree with writing about weak conclusions (weak because 14 days isn't enough time to gather the data and experience necessary to clearly conclude) based on the fact that as an author on the internet, drawing conclusions too soon can actually hurt your business.
Even if the author had made a "conclusion", he is welcome to. If he learned something in two weeks, congratulations to him. If after two weeks post launch, and months of development, he cannot plausibly have "made a conclusion", then no one on this thread has the right to "make a conclusion" after reading one blog post.
So your 9.5% is not that far off. When I did my donation to the charity my friends chose, it included a note about the 8% and told me that it's the general rate.
From their site: """
Charitable Gift Registry: The percentage listed on the I Do Foundation website for each store is the exact amount that will be donated to charity every time a guest purchases a gift through an I Do Foundation registry link. For example, a $100 purchase from Cooking.com generates $8 for charity. The I Do Foundation does not deduct any fees from these donations. When guests make online donations, an 8% fee is added to their donation. This fee covers the cost we incur from our credit card processing company. For example, when a guest donates $100, an $8 fee will be added. """
Coming to your product, it's a cool idea and you are definitely targeting a niche which makes it noticeable. One thing which I think successful entrepreneurs don't share that how do they reach their target audience. This is something which every entrepreneur should share by discussing his/her case study.
As far as pricing is concerned, it sounds like it might be best represented on a graph (donations vs. donations less fees).
Also, I'm curious about pointing people to Hover when they want their own domains: is there an affiliate relationship there? I didn't get too far into the 'help' section, but who is going to help with DNS settings? Is that something Bellstrike will provide support for?
You didn't ask for any marketing advise but have you considered targeting Christian (or other) missionaries overseas? I have several friends from the US who have moved to Africa or eastern Europe long-term. They are usually sponsored by a US church and qualify as non-profits; but they also rely on recurring support to pay their bills. I think many of them could use something like this.
Well done.
Also, pitch it to some of the top christian/theology blogs out there. Since your product is essentially free to setup/host and quite beneficial, I imagine you could get a few to post about it.
Many of the missionaries I know meet with other nearby missionaries monthly or quarterly, so I think the word could spread if you were able to reach the right people.
A minimum brilliant product, on the other hand, is something I could unreservedly support. And I think that is what you have achieved. Well done!
The site's design is indeed impeccable; did you do it yourself or did you use a service provider of some kind?
so aside from HN what else did you do to get word out and get even foreign non-profits?