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:

• Freemium is Not a Business Model
• An Understanding of Free
• Freemium Success Requires Internal Reflection

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:

1. iPhone App: our brand new Chargify to Go! app is available for free download from the iTunes App Store. Keep track of your signups, total customer count, monthly revenue, and annual revenue.
2. Freemium Model Support: our fees are based on the number of paying customers that you (our customers) manage through Chargify. That’s what’s on our pricing page right now. But we have also added a “Freemium add-on package”.

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: