Honest opinions, am I chasing a lost cause? | Hacker News Reader

Honest opinions, am I chasing a lost cause?

16 pointsmrkmcknz34 comments

I'm working on a project in which the sign up goes live in one week and I'm starting to get a lot of negative feedback and have sunk around $35,000 into the process. (Not my money at that!)

To be honest I thought the world was my oyster and I'm now in a constant state of anxiety.

Basically I've built a social payments service in which you can make a payment to someone and have it appear in their bank account direct in 3hours. At a cost of 5%; So $100 would cost you $5.

The social aspect is kind of cool and I can't wait to ShowHN.

Is this as worthless as people are suggesting?

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There's not really enough information here to tell. Are you getting negative feedback from people who have actually used / tested the product or is it just people opining on the idea itself? Now that I no longer carry cash, it is actually really hard to pay a friend. I ran into this problem yesterday and I still owe a friend $15 for lunch. There's not a good way that I've found to solve that problem (especially in 3 hours) from my cell phone. In short: I'd be pretty interested if this was well executed.

Interac email transfers. They're great (and free).

Looks like it's Canadian banks only?

You might be right. I'm stunned that a good service appeared in Canada before the US.

If you're in the US, try Venmo.

That's great and free for payments between friends. Love it. Thanks for pointing it out.

People will always try to convince you that your idea is "worthless." It's your job to convince them otherwise. Seriously, think about why you started this project in the first place, what made you say "yeah, I'm going to work on that?" In the event that it doesn't work, you'll always be able to say "I tried it." Wait until its launched and let your customers validate it, not spectators.

Yep, who would have wanted a keyboard less net book that doesn't even run pc software?

What an incredibly stupid and niche product idea!

The spectators were terribly, terribly wrong.

You're a week away from an actual answer. Launch and let the market decide whether it's a lost cause.

FWIW, Seth Godin calls what you're going through quieting the Lizard Brain, and it's something every creative has to go through – the fear of failure and being judged.

http://sethgodin.typepad.com/seths_blog/2010/01/quieting-the...

Well it isn't worthless and if you are $35K in the hole, you should just try to release some MVP and see what feedback you get. You do not want to waste too much time if it will not work, but be sure before closing shop. Most startups do not die. They commit suicide.

I'm guessing that one of the complaints you're getting has to do with the amount you're charging. Even on a small transaction, 5% feels like enough to be real money, creating a psychological barrier. Assuming you're in a position to change it, I would ratchet it down to 1-3%.

That said, if you manage to succeed, I guarantee that you'll experience a worse crisis (real and/or emotional) than what you're experiencing now. This is the roller coster that everyone warned you about (or if they didn't they should have).

If I were you, I'd stay with it at least through launch; if it's going to fail, it's going to fail. Either way, you'll be a better person for the experience. When it's resolved one way or the other, you'll be in a better spot to assess whether this is the life for you.

It's not at all worthless, but you are operating in very treacherous waters. Firstly, regulation and legal entanglements are going to be a huge issue once anyone starts paying attention to you. That alone could quite easily sink you if you're not prepared. Secondly, fraud and illegal transactions will be a big problem that you will have to deal with, which could prove costly, again, if you aren't prepared. What do you do when, not if, the Russian mafia et al starts using your service for money laundering? Thirdly, you are going up against some serious competition which is capable of operating at lower margins.

For something like this you should know enough about your market to know whether or not it has a chance, at least far better than the public at large.

I would very cautious moving forward. What you have invested is a sunk cost. You should only analyze how to allocate future resources (namely money and your time). If a lot of people are giving you negative feedback, I would change your idea. There are only two reasons for treading against negative feedback (1) you truly believe in your product or (2) you have a good track record that shows that you know better than the average consumer. It doesn't sound like you are a seasoned entrepreneur and, I'm sorry to say this, your product does not seem like a passion play.

I would pivot.

*http://en.wikipedia.org/wiki/Sunk_costs

Sounds like a fantastic idea. If you present it right, 5% is not that big a deal. Banks charge sometime $25 just to do a wire transfer, and for your 5%, you would still be winning at anything up to $500. $5 per $100 would be ok by me if it solved an immediate problem. Quicker and cheaper than FedEx.

My main concern for you would be, doesn't it cost thousands to register as a bank? Which surely you will be?

PayPal wasn't a bank (I think they might be now). If you are just shuttling money, you don't have to become a bank. However, there are rules (like no holding onto people's money).

If you can transfer amounts as low as $10 then I think the 5% fee might seem reasonable. Personally 5% of £100 feels too high.

As a counter-point, I would mention that Western Union fees seem to be about 10% of whatever you transfer.

I presume this service is only targeting the USA. Here in Europe, any bank will do immediate domestic transfers for free.

Do they provide a simple app that you can use easily with a phone? I'd say the "social" aspects are where the benefit is. Being able to let one person pay the bill and everyone else just send their part seems handy.

> Do they provide a simple app that you can use easily with a phone?

A lot do. I have two iPhone apps from my bank (one for bill payments and one for general banking --transfers, balance, etc).

At least here in Norway, most banks provide multiple ways of easily transferring with a phone: SMS, Android and/or iPhone apps and mobile web pages. My bank has all of these options. All four options in addition offer transferring between ones own account, retrieving balance, etc. The Android and iPhone apps and the mobile web pages offer more advanced stuff like paying bills, etc. as well. They even offer purchasing stocks and maintaining ones stock portfolio.

Be mindful of criticism, but also don't let it mess with your head. Any time you release something to the public, there will always be people who love it and those that hate it. If all you listen to are the haters, then you'll never succeed at anything.

The bottom line is whether or not people are willing to pay for your service. So I would go over the negative feedback and take a cold hard look at whether or not they have a point, and if so, then make a change.

But don't stop your release, you should definitely go live at this point. Don't let your ego get in the way, someone has invested $35,000 with you, so you owe it to them to at least release and then figure out if what you have is going to work, and if not, then change it.

Criticism about price from people who aren't actually customers is worthless, particularly because you don't even know who your customer is. You'll find out when you launch something.

Price is also a way to pick your customers. You want to deal with people who have money and value your product, or critical, complaining cheapskates and ingrates? Pushing yourself to lower your price pushes you to commodify your product and strip out what might be creating all the value.

You can also A/B test your pricing on your landing pages to graph out a demand curve for your service that will let you optimize your pricing to maximize yield, but I think pricing based on value creation and cost of substitutes is a better way to go.

Have you seen venmo? They do social payments with overnight transactions for free (instant payment to your venom account and overnight payment to your bank)

In their case, they took vc money and it looks like they are eating the bank fees ...

Only way to tell is to launch.

Exactly.

My question then is what would the downside be to just launching and finding out?

The 5% fee does seem to be the main point of criticism. My argument is how else in the US can you make a payment of say $30 at a cost of $1.50?

It looks like it will all boil down to the execution.

With it getting so close to launch I'm just ridiculously nervous. It's all I can think about, I just want one night where it's not on my mind. The fear of failing that is and letting people down.

I mean the other option would have been to enter YC in which case I'd be months away from release and probably still waiting on PG to tell me to pivot.

I wouldn't worry about the cost just yet. If you can really deliver three hour turn-around, you will find a class of customer who needs to get money somewhere quickly. Those will be the customers you want to cultivate.

The only caveat might be in larger transfers: if I need to get my late mortgage payment to my bank, 5% can be in the hundreds. At that point, FedEx is cheaper (but still slower). Make that balance work, and you can be successful.

Well, I would dig deeper as to why the feedback is negative. I personally hate existing internet pay services like PayPal due to their red tape, etc but then there are a lot of legal issues with transferring funds online and the government can cause a lot of problems with anyone in this business, so if the negative feedback is related to this then you may want to listen and see how to address any legal concerns

The legal regulation is what built up the bulk of the cost.

It basically comes from people suggesting they can't see why anyone would use the service, or enough to make it worthwhile.

I suggest you to read this book: The Lean Startup. It explain how to drive your startup using tests and how to validate your strategy or change it. They are many examples of successful business who has changed their strategy many times before getting successful.

http://theleanstartup.com/

My first instinct is you're worrying about nothing.

However, if you really want to know, who is the negative feedback from and what is it about? You have to be more specific here, otherwise we can't really say.

Can you put an email address in your profile?

Done.

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