Congrats, Chargify merchants! You’re growing your businesses quickly!
In January, 2012, in the aggregate, Chargify merchants billed their customers a total of $5,300,000.
That’s a huge step above December, 2011, which was $3,900,000. That represents month-over-month growth of 36%!
Thanks for using Chargify!
Just 2 days before our planned move to a new database system, the managed/shared database run by our data center has gone down for 8 hours so far.
This is a summary of things going back to Q4 2012, today, and moving forward.
What we’ve been doing over the past couple of months, and what we continue to do, to meet the quickly growing capacity needs of our merchants and their customers.
Click to read a lot more detail!
3 Years In…
Where we started.
Good decisions and some bad ones along the way to supporting 700 businesses.
How Mark Cuban got involved.
Where we’re headed in 2012.
And a look at our brand new (we just got it and it’s still empty!) office in Raleigh, NC.
Read the full article…
Lots of great stuff in the works! And TechStars Cloud wants you!
We’re happy to announce that there are now over 550 businesses using Chargify to manage their subscriptions & billing. We’re proud to have an amazing customer base and loyal Chargify fans. Some of you are even showing off your candy.
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Feedback from our growing customer base has been great. We’re busy building more amazing features to help you grow your business with Chargify.
And in more good news, Mark Cuban has invested in Chargify. Mark’s experience and wisdom building great companies gets us even more excited for the future of Chargify. BRL Law Group represented Chargify in the equity financing deal.
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Thanks for being great customers, and as always, good luck growing your businesses.
~ Lance
We try really hard to keep our systems running as close to 100% uptime as possible.
We’re hosted in a great data center that’s one of the best in the USA for systems that need to be PCI compliant. We share the place with banks, payment gateways, etc.
Our database is managed by the data center staff. This is good for a number of reasons, including keeping the DB separate from our app and being managed by others who are typically better at DB management.
We were informed recently that the DB we’re on is growing too big and is going to run out of disk space very soon. A number of attempts have been made to remedy this without downtime. The data center DB staff has tried various things with help from their DB vendor, but with no success.
Thus, we have been told today that they have to take the database offline tonight to install new disks.
Over 550 companies depend on Chargify to help manage their business every day!
From established companies like Get Satisfaction and Scribd, to startups like Jungl.me and DNSimple.
But we only hear from a fraction of our customers because most just sign up and get going… that’s the only “downside” of a great SaaS offering: if it’s easy to use, most customers don’t need us 
But we do hear from some, and this blog post gives a sample of what they say and who they are!
How do PCI requirements affect you as a Chargify merchant?
This blog post breaks it down into short sections and steps:
Who and What is PCI?
“PCI” is a term that’s coming up more and more in 2011 as banks and credit card processors get more serious about credit card data security.
The acronym “PCI” stands for “Payment Card Industry.” The full name of the organization is “The PCI Security Standards Council,” which is an organization founded by American Express, Discover, JCB International, MasterCard, and Visa. Their website is https://www.pcisecuritystandards.org.
They defined a number of security standards, but the one that’s relevant for Chargify and our merchants is called “PCI-DSS,” which stands for “PCI Data Security Standard.”
For the sake of brevity, I’ll just refer to the organization and the PCI-DSS as “PCI” in this post.
Back in October we announced that we were on the verge of becoming PCI compliant. Today we are happy to announce that Chargify is officially Level 1 PCI compliant. The Chargify team worked really hard to make this happen and it’s a great step for both Chargify and our merchants.
Why is this important?
Being PCI Level 1 compliant means we’ve been thoroughly evaluated by outside auditors to ensure we run a “tight ship” (see our certification here). Level 1 compliance is the highest certification and requirement for large processing companies. These standards dictate everything from how we secure physical infrastructure to what processes software developers can use to update production systems.
PCI Level 1 reaches into many parts of Chargify and makes us a better company for it.
This is a huge benefit to our merchants. By letting Chargify handle credit card data, our merchants can off-load almost all PCI responsibilities. It took us 9 months to do everything needed to reach PCI Level 1, and that’s something few companies want to go through if they can easily avoid it.
Be on the lookout
In the upcoming weeks we will cover what it took to become PCI compliant and how you as our merchants can make sure you too are abiding by all standards.
This is a great achievement for the Chargify team!
Some of our merchants like to see who’s running a service that their business depends on. I know I would!
Chargify is part of Grasshopper Group, which has been supporting small businesses for 6 years, and my recent past includes co-founding Engine Yard.
But that’s just part of the story…
The picture with this blog entry shows some of the great people who answer phones 24/7 and others who keep an eye on things in our Network Operations Center.
And here are 3 short videos that allow you to meet some of the team…
Boston Headquarters, Quick Tour
Insight into why we changed our pricing (definitely not greed!), and an apology from our CEO for the missteps we made.
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Hi all,
We’re still hearing the feedback and we’ll write up a “postmortem” soon regarding how we (mis)handled this. A number of people have asked for something like that and I think we can learn from it and convey some lessons from which others may learn from our mistakes, too.
I just want everyone to know that it’s definitely not because of “greed” that we made this change. “Greed” to me would mean that we’re already making tons of profit and we just want more! That is not the case.
I updated an earlier blog post earlier today to add a tiny bit about this, but the reality is that our old pricing was going to bankrupt us - if not for the fantastic backing of Grasshopper Group.
To be clear, Chargify is NOT in financial danger - Grasshopper Group ensures that.
But Grasshopper Group has a reasonable expectation for Chargify to reach profitability sooner than later. With the old pricing, and the fact that the bulk of our merchants would be on it and the majority of them paying us $0 for quite some time, the future profitability was much too far in the future. It’s costing a lot of money each month to provide what Chargify is inside and out.
UPDATE
Over the last few hours we’ve received a ton of feedback from our merchants based on the Chargify pricing announcement.
We want you to know that it has not gone unheard.
As an existing Chargify merchant, we appreciate your support over the past year and we want to continue to see you grow with us.
To meet your needs when you’re starting out, we’re offering our existing merchants the Bootstrapper Plan for $39/month. It allows you to manage up to 100 customers.
To signup for the plan, login to your account, go to My Account >> Manage Your Plans, and choose Bootstrapper.
We know that this is still an increase, but we hope you see the added value in our :
* 24/7 U.S. based phone and technical support
* Level 1 PCI compliance in a few weeks
* fully coming out of beta in order to serve you better
* and listening to your Uservoice feedback to develop Spreadable
Please feel free to reach out to us at 800-401-2414 with any questions or concerns. Thanks
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ORIGINAL POST
Over the past year, Chargify has grown as merchants sign up and grow their businesses. We definitely appreciate everyone’s business and support.
But the needs of our merchants, as a whole, have shifted from where we thought they’d be when we set pricing in 2009, so we’re changing our business and pricing to meet those needs.
If you called Chargify this week, you may have noticed new voices on the other end. That’s because our US-based telephone support group started integrating with Chargify.
And if there were any system tasks to carry out in the middle of the night, those got handled by our Network Operations Center.
Both of these groups work 24/7 to support the needs of Chargify merchants.
And while these groups are new to Chargify, they are not “new”... they have been part of Grasshopper Group for 6 years, helping entrepreneurs and small businesses. Chargify is part of Grasshopper Group, so we’re all part of the same family.
There will be some ramp-up time, of course, but as the groups learn more Chargify details, they will be able to support our merchants more and more deeply.
More and more, the answer to the question in the Title of this blog entry is “Yes!”
Here are 4 examples of interesting things that Chargify merchants are doing…
1. Simple, Flat-Rate Billing
Let’s say you have a business that charges for access to data in a database you’ve compiled from many sources. Your customers are professionals who save a lot of time by accessing the data you’ve compiled. You want to charge them $25/mo, $50/mo, or $100/mo, depending on what level of access they want.
To do this, you will set up 3 Products in Chargify:
2. Flat-Rate Billing, Monthly & Yearly, 15-day Free Trial on Monthly Plans
Starting with example #1, let’s add a yearly plan that gives the buyer a better deal if they pay for the whole year, and let’s add a 15-day free trial to all the monthly plans.
We’re growing every day and we need help to keep offering good tech support in a timely manner, so we’re looking for someone who can work from home for 1-2 hours a day as a contractor.
We prefer someone in the USA, since most of our customers are here and our team is here.
It’s not required, but we prefer someone with Ruby and Rails experience, since that’s what Chargify uses internally and it would be especially useful if this person could go in and do development-type things that occasionally come out of tickets.
Support requests come mostly in the form of written tickets, but some come as phone calls and tweets.
UPDATE Sept. 7, 2010—- There are now 2 videos with this entry. Check out both to see what you’re getting when you depend on Chargify.—- UPDATE
We recently did a significant system upgrade. Some of you may remember it - it was a few hours on a recent Saturday night.
The upgrade increased our capacity, which we could have done on many computing platforms, but the real story is this: We moved a long way up the ladder of financial transaction experience & security.
Our new transaction processing facility is focused on financial transactions. That’s the majority of their business. The rest of their business is related to healthcare and Sarbanes-Oxley. All serious stuff.
Our knowledge and experience at Chargify is quite good (especially through Grasshopper Group), but it’s not the same as having a large staff with 15 years of highly focused experience.
At our new facility, we’re surrounded by giants like MasterCard, Bank of America, and Toyota. We’re a small fish, and that’s good - we benefit from the standards that are demanded by the big fish.
One Year In, a Really Dynamic Business
Our code base is over a year old and I thought it was a good time to think & write about where Chargify is and where we’re headed.
Overall, people seem to like Chargify .
I’ve never been part of a more dynamic business. I’m amazed and inspired because most customers are start-ups or small businesses, which is a nice bit of news against the backdrop of recession. There are developers who give back to the community in the form of sample code. And some of them also offer consulting services to other customers.
We’re of course delighted that so many businesses and developers put their trust in us. There are challenges, of course, but so far we seem to be keeping up with them reasonably well, even with the occasional glitch.
Merchant Accounts & Payment Gateways
We reach a lot of small businesses and software developers who’ve never needed to know anything about merchant accounts and payment gateways, so I wrote up a personal blog entry a few weeks ago that explains most of what you need to know - from what the pieces do to where to get them.
If you’d like to learn more about merchant accounts and payment gateways, in general, please check out Merchant Accounts & Payment Gateways… Keeping the Grass Green!.
Why We Removed PayPal WPP
Back in April, were excited to add support for PayPal Website Payments Pro (“WPP”) for Chargify merchants in the US, UK, and Canada. WPP provides an additional and in some ways easier path for startups and small businesses to get a payment gateway and merchant account in one package.
Lincoln Murphy of Sixteen Ventures presents an in-depth look at the Freemium model in SaaS companies.
What is Freemium, you ask?
Well, Freemium is defined by wikipedia as “a business model that works by offering basic Web services, or a basic downloadable digital product, for free, while charging a premium for advanced or special features.”
In his book he defines Freemium as “A marketing tactic where a Software-as-a-Service (SaaS) vendor has both a free and paid version of their product.”
Some of the areas Lincoln Murphy’s book addresses are:
Last week was a great week at Chargify. The team is normally spread out across the USA, but last week we all worked together in Sacramento, CA.
Two exciting and useful developments happened over the weekend:
As a startup, we face many of the classic trade-offs between getting things done quickly and getting them done the best way possible. The right answer is usually somewhere in the middle. Since we’re dealing with our customers’ money and business transactions, we err on the side of doing things slowly and methodically, especially on core issues.
GATEWAY COVERAGE
Hundreds of people want us to add other payment gateways. This is absolutely true for people outside the USA, because they can’t use our currently-supported gateway, Authorize.net, which means they can’t use Chargify. And that’s a shame!
We’ve been gathering info since November on what gateways people want. In parallel, we’ve been investigating ways to add gateways - quick ways vs best ways.
If you’re a developer, you might ask why we don’t write code for each of the different gateways’ APIs. Especially with things like ActiveMerchant (in Rails), we should be able to add gateways very quickly. Yes, but…
Acronyms can be corny, right ?
Sorry that this post is so long! It covers 3 years of experience, as well as my recent journey with some great folks to help provide a solution to a problem that’s been affecting entrepreneurs, web startups, and SMBs over the past few years.
The businesses I’ve been involved in since 2006 are all about billing the same customer repeatedly. The product never “ships”. Instead, the product is something that flows continuously from us to our customer, and money flows back to us.
Consequently, billing customers involves more than it used to.
BAM!
The activities that surround recurring billing touch many parts of a business. These activities, added together, can be seen as a business unit, just like Marketing or Human Resources. As a business unit, BAM can include all of these things:
