Business and Finance Reviews

Posts Tagged ‘Hacker News’

Like many entrepreneurs, the people behind the online billing-Chargify start-ups often fantasize about generating buzz on some sites of the world’s most popular technology. One day in early October, about a year after the launch of the company, they got their wish.

“I’m sure you’ll be laughing all the way to the bank, but not with my money,” posted on forum news customer Chargify Hacker technology online. “Today you’ve turned around and told us all that we are not important to you,” grousing. Others are more directly: “Wow what a kick in the nuts …”

That morning, Chargify, which makes web-based system that used a small company to manage billing, has announced that it changed the model designation of the price. In particular, it removes the free service was offered to entice customers to sign up. The idea behind the Freemium model called is that the user is free to be in time to the upgrade version which costs $ 49 to $ 2,500 per month. Problem: After 12 months in business, less than 1 percent of the clients who pay a dime.

Siamak Taghaddos, founder of Chargify that David Hauser and know that no one will appreciate the changes. But pushback proved stronger than anticipated. In addition to the negative comments on Hacker News and blog TechCrunch, a Needham, Massachusetts-based company was flooded with angry e-mails. Whether or not the price change is a good idea, obviously companies have bombarded the communication.

Taghaddos and Hauser Chargify launched in September 2009. This is the first in-house business incubated during the locust Group, makes a suite of products for small business owners, including Grasshopper phone system. Billing-software market is a crowded one, and trying to stand out Chargify partly by his approach to pricing. Users with 50 or fewer subscribers can use it for free, like Chargify companies grow and acquire more customers, they will switch to options premiums. What’s more, unlike some rivals, the company does not collect fees for each transaction or ask for a percentage of total billing.

Before the launch, it seems like a perfectly sound idea. Given the experience with Taghaddos and Hauser Grasshoppers, they thought that 15 percent of customers who don’t pay Chargify will grow into people who pay within three months to six months to register, which will provide enough income to build a sustainable business.

But six months after the launch of Chargify, it is clear that the model was not working. “We are attracting fans too much – that is, with few exceptions, are never going to succeed,” said Hauser.

The company’s executive team agreed that to lure more fast-growing businesses as customers, needed a new pricing structure that will get rid of the hobbyists. The team agreed to eliminate free choice and raise prices for companies with up to 500 customers from $ 49 per month for $ 99 per month. The price was justified, the company believes, because of Chargify is adding new features, such as round-the-clock telephone support and service credit card security compliance. This is a bold move-Chargify now will have the highest entry level price in the market.