The Next 1,000 Start-Ups | Hacker News Reader

The Next 1,000 Start-Ups

braintreepayments.com

210 pointsdaniel_levine79 comments

Good move by BrainTree.

As much as I love Stripe and their innovative moves, the bulk of my business's transactions have been handled by BrainTree over the last 4 years. That includes both SaaS subscription billing and third-party payment aggregation (we do niche ecommerce, take a transaction fee, and ACH to customers). Our transaction fee is below the (now seemingly) standard 2.9% which adds up when you get to hundreds of thousands of dollars or more in processing. BrainTree's support is great ... I'm talking Rackspace-level great.

Some of you talk like BrainTree is an old-school behemoth which is being disrupted by Stripe, which is silly. News flash: BrainTree is not PayPal. Obviously they are all competitors, but I see nothing to indicate that BrainTree can't keep pace with Stripe moving forward.

I do use Stripe for things–and I do love it. But we wouldn't be where we are today w/o BrainTree.

Agreeing with everything here, and adding the fact that Braintree has incredible support. There have been several occasions where I couldn't figure out a bug on my side, or there was a gap in our database records while testing a new feature, and I was able to get on the phone with a customer service rep and get it sorted out in minutes.

I've never had such a pleasant customer service experience before, doubly surprising because it was with a financial service.

Braintree is pretty awesome.

A cute marketing trick. No you're not doing this just because you want to "help new startups". That's a nice way of rationalizing it, but really

1) Braintree is suffering from the competition, especially on HN, Stripe is loved like no other

2) They're not giving away 2 million dollars. With so many startups failing to ever generate significant revenue, I wouldn't be suprised if less than 10% of companies that are the first 1000 to register actually wind up generating $50k in revenue through their service. I'm sure Braintree have their own internal calculations about how much this will cost them and that number is certainly no where near 2 million dollars.

3) The primary purpose of this is to bind new businesses to Braintree. The scenario of "getting their free processing here and then going somewhere else before they pay us a nickel." is cute, but misleading. At that point in the company's development switching the entire payments system is much more expensive and would not make any economic sense.

Props to Braintree for coming up with this, I think in the end it's beneficial to the startup community, though I dislike the "second coming of jesus christ"-vibe of the announcement. They're doing this for business reasons, not because they woke up yesterday and felt a little charitable.

Why is this getting downvoted? It's cynical, but definitely a legit and structured response.

Out of the 19 comments in this thread, 3 were by 3 distinct Braintree employees.

In all of my time reading HN, I don't think I've ever seen so many employees of a company post in a single thread.

I'm not really surprised there's a few initial downvotes for negative responses. I initially wanted to ask the downvoter to explain their reasoning, but decided not to as it would probably just read "people reading this response goes against the interests of parties I'm associated with" :)

I downvoted you because I dislike that attitude that is prevalent here... "You're not our preferred vendor so this is a cheap attempt at getting our business!".

If you think this is spam, flag it as so, but it's annoying to me that the crowd has favorites, and when those favorites have promotions people glow about how great they are, but if the competition does something similar it's an evil attempt to gain market share. We know this is marketing, no one is being duped. (Disclaimer, I'm a Stripe user!)

I think my initial post is being misunderstood. That's probably my own fault. I like what Braintree is doing here. I don't like how they've worded it. It's as if they think their customers are dupes, stupid enough not to see that they're not actually spending millions of dollars on the startup community.

Would you ever see such marketing BS come from Stripe? Not in a million years. And that's why I originally wrote the reply.

I downvoted your original comment as well, though I will admit that I was somewhat conflicted in doing so. My reasoning is that the crux of your argument is based on the statement you just made -- "It's as if they think their customers are dupes," -- and I think that's a strawman.

It's common knowledge that companies offer sales to move product. It's also common knowledge that is a benefit to the companies. My opinion is that affect does not, or should not discount the news of the sale. It's like critiquing a television ad for being self-interested. Of course it is, it's an advertisement, as this is. That doesn't mean that we should dismiss it any more than we should dismiss any product that has a price attached (unless that's the point you're arguing -- I don't mean to rule out an RMS-style argument here).

For what it's worth, they are losing millions of dollars on this deal. You're right, it's a loss-leader, but they are losing revenue by offering the sale. That's how a sale works. You offer a discount to get people in the door and hope that the quality of your product can sway them into becoming loyal customers. If they are unable to convert those prospects into customers because their products aren't strong, then they will have simply lost the revenues otherwise entitled to them had they not offered this sale.

In summary, you took the obvious point and made it sound much more negative than it is. On a more meta tangent, I recently posted something like "Now that I know what a middlebrow dismissal is, I'm worried that every dismissal I make will be categorized as one." -- I made that as a joke, but I'm honestly concerned about it and now that I'm aware of it, I believe that it is a problem on HN. I believe there are numerous problems on HN, and through downvoting, comments and my own behavior, I would much prefer it be fixed than abandoned. My personal fix against the middlebrow dismissal is to not be dismissive, which happens to fall under my own personal HN guideline of "assume good faith."

By 'assuming good faith' of all parties and not being dismissive without being constructive, I think we'd have a much better environment, though I do worry that it would become too 'vanilla' (as my own posts often tend to be when I reread them.) Regardless, the easy fix for you at the moment is to just quit caring about karma altogether, and then you can probably ignore these meta-discussions outright.

Because the announcement was about rainbows and puppies, and buddy boy over here is being a wet blanket. He also openly stated what others (like myself) were thinking.

I think his comment offered a different perspective. Nothing wrong with that. It's healthy.

Now I'm confused, is competition healthy or is it an affliction from which a company "suffers?"

Competition is good for consumers. So in essence this is probably one of the positive effects Stripe has on the payments landscape. Not only are they offering a well-received service. They're also forcing their competition to come up with ways to make themselves appear more attractive. Would Braintree do the above if they were the only company offering such a service? My bet is they wouldn't even think about it.

>Would Braintree do the above if they were the only company offering such a service?

But they aren't the only company now, so why the hypothetical? Who cares if they did it due to competition, due to the goodness of their hearts, our due to an acid trip? If the end result is the same, and that end result is helpful, then that's a net positive in my book.

EDIT: Since everyone is offering disclaimers about who they like/use, I have used both Braintree and Stripe, for my own startup, and for a few freelance jobs. I've had nothing but help from any support tickets/calls I've had to make, from both companies. So in my mind, this really is a scenario with something good happening and all else is held equal.

Yup. That's what I said in the original post. This is a net-good for the startup community. It's not charity though, as they'd like to make us think.

Both.

I think you are getting downvoted because your comment embodies the easy snark that is REALLY hurting this community. IMHO, seeing that your comment is currently at the top tells me we still have room for improvement.

I don't think anyone is deluded into thinking this is a charitable gesture, certainly not on hackernews, so I am confused why you spent so much time to (in an agitated way) make it seem like Braintree is pulling one over us.

I tried to clearly differentiate on what I think about the offering (beneficial to the community) and how they worded their announcement (misleading).

Yes, I realize the majority of my message was spent in negativity. That is something, I, myself am working on.

>I am confused why you spent so much time

I enjoy the discourse on HN. It's good practice on how to express oneself (especially seeing as how English isn't my native tongue) and I enjoy the upvotes from people who I consider peers in the tech community (who there's very little of where I currently live)

I don't understand why people get offended when someone tries to find a motive behind something

  “So, what’s the catch - is this just a marketing promotion.” There’s no catch, no strings attached, no BS -- we just want to do our part to give back to the community that made us successful and this is our way of paying it forward.

Clearly Braintree wants us to think they are doing it to do 'their part'. Pointing out that this might not be true shouldn't offend you. The parent is not challenging your intellect. He is just making an observation. I got a few negative comments on something similar I wrote about github http://minhajuddin.com/2012/09/29/github-is-not-really-free-... .

Am I missing something here?

> Pointing out that this might not be true shouldn't offend you.

Speaking for myself, I'm offended by such comments not because they aren't true but because yes, they do offend my intellect and waste my time. We all know that Braintree and Github are not charities, let's talk about something interesting instead.

Also, vendor lock-in with a payment processor is pretty strong. Kudos to Braintree for supporting portability, but you're still locked to an API unless you want to re-code everything.

In other words, the first $50k is free, and then you're tied intimately to BT's API. The path of least resistance is to just keep going with them. You're making money. They're making money. Everybody wins. I don't think this is a bad thing, it's just not all charity.

All that being said, if they announced this 4 months ago when I was migrating my payment system over to Stripe, I'd have been all over it. BT seems awesome and this is a great deal. Stripe won based on price[1], but $50k free really tips the scales on that.

1. http://agileleague.com/2012/08/migrating-away-from-authorize...

Another "middlebrow dismissal", voted to the top of the thread.

http://news.ycombinator.com/item?id=4712867

http://news.ycombinator.com/item?id=4692794

http://news.ycombinator.com/item?id=4718083

http://news.ycombinator.com/item?id=4723926

The first point is plainly false. Braintree isn't "suffering." The third point is true, but cynical and obvious. Is it really surprising that you probably won't change payment processors, or that they want to keep your business? Is that really the most interesting point you can make?

The second point is actually a very good one, and it would be interesting to see what actually happens to the 1,000 startups. I suspect we'll see most fail to make anything close to $50,000 and a select few make significantly more.

The thought of "middlebrow dismissals" came to mind when I saw the ensuing discussion. Now I don't think I fully understand what is meant by the term. Further googling didn't bring up anything else, but if it's meant that I simply dismiss what Braintree is offering here, that is completely false. I welcome it. It's a good move. What I found issue with, and discussed at length was the wording of the post. It's not charity and I don't think anyone can disagree with that point.

>The first point is plainly false. Braintree isn't "suffering."

"suffering" may be a little colorful in choice of words, but I don't think it's strictly false, especially on HN where Stripe.com gets beaten in per-domain popularity only by the almighty domain-overlord himself, paulgraham.com

>The third point is true, but cynical and obvious.

I disagree that it's obvious. I think many people underestimate the potential cost of binding their entire business to a single platform, especially when that platform is payments, something that inherently people _do not_ under any circumstances try to mess with if it already works.

>>The thought of "middlebrow dismissals" came to mind when I saw the ensuing discussion. Now I don't think I fully understand what is meant by the term

It's a spin-off from the term "highbrow", which means "intellectually stimulating". http://en.wiktionary.org/wiki/highbrow

A middlebrow dismissal means you are giving it only a half-thought before dismissing it, as opposed to critically thinking about it from multiple angles and offering an opinion that can result in a highbrow conversation.

Ah thanks! I knew there was some part missing to my full understanding of the term.

If I were to criticize my original post, I'd say it's overly negative. My tone was dismissive and that's probably what most people found issue with. It's a good lesson. I can present the same content without come across as negatively. Though I do love a good controversy :)

Why middlebrow then, and not lowbrow? Honest question, from a non-native speaker.

I first saw the term middlebrow in that thread, and I'm still not sure how i feel about the term, but "lowbrow" refers to completely non-intellectual things, and would not appeal at all to someone that values intellectual thinking. I hadn't heard the term until that comment thread, but apparently it has its own Wikipedia page, and has been around since 1925.

Because middlebrow posts appear intellectual on their surface. They are not quite lowbrow. But they aren't highbrow either, for the reasons explained.

A middlebrow dismissal? I thought it was an "Oreo objection".

Well, yeah duh. But who cares what their true motives are? Why are you complaining about free credit card processing?

Also, everyone is trying to do cost calculations based solely on their transaction costs. You are not counting all the customer support they have to provide to setup all the accounts and maintain them which is significant.

There are multiple aspects to payment processing with basic payment processing and integration being the minimum -- Stripe currently has the most beautiful story here.

Things get more complex on the back end of the payment being processed at scale, namely fraud detection and risk mitigation. This is where some of those behemoths in the industry actually shine more.

Stripe passes the risk directly through, you are on your own.

For a lot of folks here working on startups with their first few-hundred customers, that isn't the problem -- the problem is accepting payments and getting back to work. I don't see anyone beating Stripe in that game.

For the folks that have huge customer bases, mitigating risk and dealing with fraud is a much more frequent/costly problem and having a processor help out there is why companies like PayPal (and BrainTree?) are still in people's vocabulary even though a good majority of their experience on the front-end suck.

This is one of those problems that doesn't matter to you at all, until it does... then it is a huge nightmare and you scramble around looking for a solution and suddenly realize why "everyone doesn't just use Stripe" -- or some equally hot new processing startup.

I'm not sure I agree with you. I've had to deal with plenty of fraud issues.

How is Stripe passing the risk on any more than other processors? [1] The end-result of fraud (at least, the kind I'm familiar with) are chargebacks. Those are going to fall back to you regardless of who your payment processor is.

We've had major fraud issues on our system which is powered by BrainTree. When you hit a certain chargeback rate, you basically get a call from the underwriting processor/merchant who says "Get your crap together or get lost".

PayPal is a slightly different animal IMO.

https://stripe.com/help/disputes

My guess is that it depends on your business model.

(1) The risk to a TPPA model would be a fraudulent payment merchant signing up with your service buying from themselves with stolen cards. Charge-backs would occur here once the card owner discovered the card was stolen.

(2) The direct sale model risk would be selling and delivering a good or service and then the card holder (stolen or otherwise) charges-back to get the good/service for free.

In case (1) fraud detection would help detect the stolen card and mitigate the risk. In case (2), legitimate charge-backs from non-stolen cards are probably sometimes the bigger risk. I most likely didn't hit all the cases here but it certainly seems to be the case that PayPal or the like would not always help your business model with fraud prevention, supporting what callmeed said here.

Interesting move. Too bad it's US only for now.

We're currently using FastSpring but both the recent opening of Braintree towards Europe and the price getting a clear 2.9% + $0.3 are making it pretty interesting.

Make a similar promotion for Europe and I'll probably switch.

We would love to do this for startups around the world. It's tricky to do with international banking relationships, but we'll continue to work with them to bring more opportunities like this outside of the US.

This is classic competition at work. Along comes Stripe that forces companies that are not asleep, like Braintree, to compete on price or innovation or some other axes.

When I was doing research on this for my startup a few months ago, we found that Braintree easily beat Stripe on price. This is just icing on the cake.

Braintree's not as glamorous (I think), but if you're doing a large number of transactions, Stripe's 2.9% + 30¢/transaction is quite high.

Your analysis is true although now Braintree's pricing is that of Stripe's - at least for startups who can't or don't want to spend cycles getting a stand alone merchant account. So it's good to make that distinction. I suspect the value with BT is that once you get real traction you can opt out of the more expensive rate into something more competitive - probably as soon as when you're doing a few thousand dollars per month.

Don't the rates match for Braintree & Stripe now?

To provide some perspective, I did a calculation using their pricing information and assuming the average transaction size of $10 - the waived fee amounts to $2950.

edit - changed language to make it more meaningful

Please fix headline to:

"Braintree Waives All Fees On First $50k in Transactions For Next 1,000 US-Based Startups"

Might be a good idea to do this always, just a little thing to acknowledge the other 95% of the world..

Agree. It should be at the top not at the bottom of the post. Cruel tease to many who'll see this.

Boo -- someone changed it to the much less informative "The Next 1,000 Start-Ups" :(

Mods, please prioritize informative versions of titles!

Yeah, I clicked on this expecting a piece about the medium-term future of startups (the next 1,000 startups, say). A title indicating it was a promotion targeted at startups would've been more informative...

I wonder if Braintree has been suffering since Stripe launched and this is an effort to get things moving again.

Was thinking the exact same thing. Another evidence of how (quality) competition benefits the customers… :)

Amidst all the weird negativity and to-and-fro, just wanted to say "DEATH TO PAYPAL API INTEGRATIONS!"

Go Braintree. Go Stripe. Go Recurly. Go CheddarGettar. Go Spreedly. Go whomever has the guts to tackle this beast!

Apologies to my friends at PayPal in case they read this....

This needs to be voted up to the top :)

Awesome! Payment processing is probably one of our biggest headaches, and this just gave us enough of a reason to try you guys out. Excited to try it out.

What about those startups that already have an account but not generating revenues since they just launched a week ago?

As with most promotions aimed at user acquisition, you're unfortunately out of luck.

@sethbannon- This is not most promotions. Our goal is to help startups get off the ground.

@davidedicillo- We're happy to help recent signups who qualify, shoot an e-mail over to support@braintreepayments.com and we'll set things right.

-Kristi from Braintree

You don't speak for braintree.

yes yes yes!

"Note: we’re only able to offer this to start-ups with a presence in the US today. We recently launched in Europe and Canada and hope to be able to do something similar for international start-ups soon."

Oh... maybe later

Excitedly rushed to sign up as we're interested in offering alternative payment solutions - disappointed as we're in the UK we can't and this wasn't immediately obvious!

Either way looks like a very cool offer!

any company naming themselves after a town in the UK ought to be available here...

Braintree's service is available in the UK, we just can't make the free processing offer outside of the US. Check out https://www.braintreepayments.com/tour/international for more info.

Also, our company name comes from the town of Braintree, Massachusetts, which is the home of the American revolutionary John Adams. I hope you won't hold that against us.

Ah I guess Braintree MA is named after the original!Will have a look, thanks.

The promotion is only available to "eligible merchants", but it is not clear what qualifies one as eligible.

Anyone from Braintree willing to clarify?

Michael from Braintree, here.

The idea behind this offer is to help launch more startups. We aren't policing this with specific limits, but we're asking that you only use this if you are truly a pre-revenue start-up or just started to collect fees for your product. If you’ve already got your start, then congratulations - we would love to work with you and help you grow. And you'll probably find that our standard pricing works well for you.

I'm happy that you changed your pricing to 2.9% + 30¢ - it did actually feel too expensive before. Thank you for supporting The Rest Of The World too! If I needed a payment gateway right now, your service would be a total no-brainer.

So 1000 startups, meaning 100 real new startups (I doubt startups that are already into payments using other platforms would switch), of which 10 or less startups could really do 50k in transactions, meaning 10x50000x0.027 = $13,500 (tops and not $1M) in loss for Braintree... But I am sure they are getting way too much marketing out for this.

Not to mention you need an account with them in the first place and Braintree is well known for having a ludicrously strict risk team.

So yes, this is just a marketing gimmick.

Kristi from Braintree here. Admittedly, our legacy bank relationships left us as the middle man to their risk departments. This may be what you are referring to when you mention the "ludicrously strict risk team." This is no longer the case. Starting with the launch of our instant product, we brought risk in house. We are able to use our years of experience working with startups to develop risk processes that help us build relationships, not get in your way.

The funny thing is that if you went in as the VP of Sales/VP of Marketing to the CFO of Braintree and said "Our exposure is just $13,500!" he'd beat you with a stick. The good news is the alignment is right here. The more in actual lost transactions fees that occur during the promotion the happier Braintree and the startups will be. As noted Braintree has its eyes further down the road.

Tell you the company that will get my business out of stripe, braintree and the others. The one that works out how to let us open an account without an SSN. Currently we are with SAASY for that reason, they charge 5.9%.

@corkill - I work on the signup and application process for Braintree, and I would be curious to know why SSN is a deal-killer for you. Do you not have a SSN, or is it just something you would rather not share? Feel free to email me at mboeke@braintreepayments.com if you would like.

Is this literally the next 1000 braintree signups or is that a marketing term?

Hey, it's Caitlin from Braintree. Yes, this is literally the next 1,000 merchants who signup through this page: https://www.braintreepayments.com/next_thousand_startups

The "instant signup" page says I have to wait one day for underwriters to assess the app, is that normal?

Most applicants will be approved instantly. There are some circumstances, such as the specifics of your business model, that may require a brief manual review. At most this will take 1 business day, but many reviews will be much quicker.

The good thing about doing this upfront is that you don't have to worry about running into any issues (like unexpected shutdowns) as your processing ramps up.

What about existing startups using braintree that haven't hit that level yet?

The idea behind this offer is to help launch more startups. If you are a pre-revenue start-up or just started to collect fees for your product, then shoot us an email at accounts@braintreepayments.com, and we're happy to help.

I have 900 different startups all with a variation of the name GiveMe50000FreeAmexPoints.com

I wonder if my startups are eligible. :)

Looks good for starting out. Reminds me, has anyone heard back from startuppack.org?

This promotion doesn't apply to third-party payment aggregation businesses.

It looks like they can't handle the traffic. Not a good sign for them.

Braintree here. Can you elaborate? We're not seeing anything slow down on our end.

Couldn't agree more.

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