dh

Thanks for reposting, Tumblr still has problems.

I agree you need to be careful when you do creative marketing and there is a line that can be crossed and will hurt you and your brand. Great example from Acclaim Entertainment.

The blog is on Tumblr, guess they still have more problems

Check out these 2 posts

http://cdixon.org/2010/08/21/the-bowling-pin-strategy/

http://cdixon.org/2010/10/16/the-ladies-night-strategy/

As entrepreneurs in the US are trying to create jobs and companies we pay 30%+, just not fair.

Chargify does not store the CCs it is stored with the gateway so you can use that data again. This is said a number of times on the site.

Your comments yesterday are appreciated but the asking for angel investors just seems a bit odd. If you feel investment distorts a market and that is bad, then every market is like this and in your view is bad. Beyond that investment is not a lottery in anyway.

We have built Grasshopper Group over 7 years with NO outside capital at all. I am all for talking with competitors and love many of them, but your view of "sugar daddies" and "investment lottery" is just wrong and makes you look bad.

You make some great points and the no support option for free users was something that was and is an option, as I said in the post.

Totally understand the reasons not to offer this, but we feel it is pretty important the ability to call your billing provider 24/7 and talk to someone as well as a NOC that is staffed 24/7 monitoring all systems. Collecting money is what makes a business work, sending an email that someone might get to the next day just is not good enough for us.

Very thoughtful response and love the passion. We are in a very limited segment of Chargify customers that actually have many freeium customers and we would love to work with you to make sure pricing works for you.

There is much talk about freemium but over 12 months of data show that companies actually doing this that are using are system are under 2% of our customers. Feel free to email me, send me a twitter message, anything you want and we will figure out something that will work for you.

Thank you for the feedback and you are right that the pricing does not work for someone with only 4 customers. Keep in mind that starting a business has costs, even opening a bank account and collecting money is pretty core to this so we do not expect this to be a free service.

We made many mistakes with the implementation and communication with this but do not feel that the $39 plan made this worse. We always listen to our customers and have done this for 7 years at Grasshopper and have gone through both price decreases and increases. We will continue to listen to and work with our dedicated customers and passionate Hacker News followers.

My name is David Hauser (@dh) and I am a founder at Chargify as well as the Grasshopper Group where I have spent the last 7 years serving hundreds of thousands of entrepreneurs and helping them to succeed. I want to respond directly here and invite anyone to reach out to me personally on Twitter or email to talk about this or anything else.

We made a mistake with how we implemented and communicated a massive price increase and in doing so totally ignored our loyal and amazing customers that spent the time to integrate with Chargify. After starting many companies with NO outside capital I understand the struggles of a bootstraping company or lean startup so we should have done better with this.

Listening to the feedback here and via many other channels this was very clear and we wanted to make a quick change. We have released a $39/month plan that supports 100 customers for anyone that has signed up for an account, does not matter if you never used or have not started to integrate. Some important points.

- Only active customers are ever counted in your customer count

- $39/month plan will be available for anyone that has a Chargify account now. Do not worry that you will miss signing up, it will be available for you

- Offering the type of support that we want to is not cheap, and it is how we do business

- PCI Level 1 is both expensive and valuable and we want to provide that to our customers

While we firmly believe that Chargify and many competitors provide great value to a company that wants to do recurring billing we realize the mistake that was made. We will not go back to free as it will not allow us to support our customers the way we want to. There will always be a "cheap" or cheaper competitor out there but we are not that one.

Appreciate the thoughtful response and great to see a competitor growing in the space, brings everyone up.

We appreciate the feedback from all of our loyal Chargify customers and we will have an update shortly to show we understand this support. A plan only available to those that already have accounts that will be much less and have a smaller number of customers.

We are very sorry that we did not show this understanding in our announcement and pricing. No excuses.

What a great question, I was looking for this data for a presentation at gave at FOWA 2010 last week. See slide 30

http://www.slideshare.net/davidhauser/fowa-2010

Thanks for including Chargify

This was planned from day one, Google only wanted the massive data set that they collected to improve voice recognition in other areas. Rather than buy it via another channel they acquired this data set with this service.

Thank you for the very thoughtful write up about the reasons not to build billing and how Chargify has helped. The ownership of CC data is an important topic and many providers talk about the importance of this. Three things to consider

1) How often will you actually change gateways? I can tell that we have had the same gateway account for 7 years and processing millions of dollars a year and changed merchant accounts many times. The gateway industry is pretty much a commodity, very little price change, no difference between gateways so there is not much value in changing. There are reasons you might change merchant accounts as rates do change and volume can make a difference.

2) How to change. If you really do need to change gateways and keep in mind Authorize.net is not going out of business so that is not a consideration, think about the right way to do it. I would either slowly move accounts over as operations like CC updates happened or run multiple gateway accounts to diversify risk.

3) Where is the risk? The largest gateways are not going anywhere so your real risk with not doing billing on your own is the billing provider. And yes I am saying this and I am a co-founder at Chargify. Would you prefer to have your CC details held there or at a gateway where you can always access the token to make future charges? This gives you the ability to move billing providers compared with getting locked in.

At Chargify we take security very serious and have reviewed all of the different reasons around this topic and can tell you that today all CCs are stored at the gateway but in the future we will have an option that gives YOU the choice where to store this data and how.

Glad you think Chargify is the right path, love to hear what flexibility you want that we cannot give.

Since you have to have your own merchant account, we (Chargify) do not have to deal with the fraud transactions but give you the tools you need like searching for the account to turn it off.

PayPal might be very quick and easy to get going just like Google Checkout or Amazon Payments but you need to think about what is best for actually serving your customers and making it easier for them to pay.

- Standard PayPal Your customer must have a PayPal account which could lower your conversion and for sure does not give a professional image. You can schedule a payment to happening each month but it is an amount not a product/plan, making managing customers very difficult and reporting almost impossible. Similar issues apply with Google Checkout and Amazon Payments

- PayPal Website Payments Pro This is a gateway and merchant account combination that they offer as a package to try and attract merchants. There are some simple recurring payment options but nothing really. The bigger problem here is errors and support. Try calling PayPal when something does not work, good luck. We have a senior level account manager and direct contact with the Director of Support for this product and this bug has been open for 3 weeks and they still cannot fix. http://support.chargify.com/discussions/support/3296-decline...

- Real gateway and merchant account Your best option and not a lot of effort if you are in the US or have a US bank account. Overseas it is a little more effort but nothing crazy. If you are concerned with getting the best rate and quickly, we have a few partners for this at http://chargify.com/merchant-accounts/. And you can use this and not use Chargify, so it is just there to help you.

While there are many reasons you might want to use Chargify or a similar type of service rather than doing this directly you can of course build it yourself. Just think about what you would prefer to spend your time on. I encourage you to talk to actual customers of any product you pick, look at the community around the company and who participates and then make a decision.

As a founder at Chargify, I would love to see you working with us, but more important I want you to make the right choice for your business so I would say almost anything is better than PayPal.

Then I would either collect at signup or just after but before use. This will allow you to focus on attracting the right customers and not dealing with a ton of people that will never pay you.

Amazing company for load balancer based on open source stuff, but with enterprise support. Can run on dedicated hardware or VMWare.

http://www.loadbalancer.org

I would focus on the marketing and project management side and use your other skills to help you. While coders/developers are very valuable to tech startups there is just a valuable position in project and product management which requires a blend of skills. The ability to talk to developers, do some basic marketing and design and then manage a product from start to finish.

I would look at how many repeat visitors, how many people share it with another person, and ultimately how many people pay for it. Cause people vote with $ and make a commitment.

There are so many things you need to look at with this question. The first question I would consider is what is your goal? More signups? More conversion to paid? Less work? Once you have set the goal you can then test it.

With out data but thinking what I have seen in the past I would say here is what the possible things are.

- Collect CC at signup - will reduce pure signups but will have a higher conversion after the 30 days - Don't collect CC at signup - more signups, but lower conversion as more tire kickers and missed emails about putting the CC in - Collect CC after signup at first login - maybe a blend of the two above

There is no harm in talking to the right people at anytime. It does not mean you have to raise money right now or that you even find the right partner but you will learn a lot about the business and yourself along the way. If the question is should you take money, you are in a much stronger position when you have traction (however you want to measure that).

I can see the problem from both sides but really Heroku had some more more to gain by just crediting it or most of it in what you would say about them. Clearly by the rules, you should have to pay, but that does not mean that a business should not do the right thing and work with a customer.

Imagine how big a raving fan you would have been if they had credited the entire thing. That is a tiny cost compared to acquiring a new customer and turning them into a raving fan.

Really the first thing you must decide is that you need to charge as this is the only real way to get validation that what you provide is valuable. Someone needs to give you real dollars for what you do.

As for the actual price there are a number of ways to attack the problem but the key is the price will change over time as you learn from the marketplace and your customers.

- Ask your most active and least active users what they would be willing to pay and test them after they respond by asking them to actually pay what they suggest

- Survey the market and decide if you want to be low cost, high cost, or best value. This will give you a range of where to start

- Work with a pricing expert like http://sixteenventures.com