I (transparently) love HN, but very much do not love HN on pricing. A blog post is sitting in my drafts folder about this. One of these days, one of these days...
There are numerous Ask HNs about our demographics. Take a look at them. Compare with your domain expertise about people who run non-profits. The differences are fairly dramatic.
You'll never win an argument about pricing with someone who is not in the market for your product anyhow. Their opinions are not relevant. Getting $0 from HN readers will not compromise the success of your business, since there is no pricing strategy which will result in you getting more than $0 from HN readers.
I also think that 9.5% is less than 6% + 3.5% when considered from the perspective of the people whose opinions matter to you making your rent next month. For that matter, I think 10% would also also likely be perceived as less than 6% + 3.5%. In any event, you'll likely be additive on their existing revenue (or the customers will think you are), and 90% of free money is better than 100% of no money every day of the week.
The cost (time, money, etc) of setting up their own website and processing their own transactions is obviously prohibitive, as most nonprofits don't accept online donations.
Lots of nonprofits also know exactly what percentages of their revenue go towards administration and marketing, so they're likely to have a good comparison point for how much it costs them to receive donations by other means.
You're correct - we are additive on the nonprofits' existing revenue (other than cases where they would be switching from another service). The problem that I seemed to be encountering in emails from prospective customers (actual nonprofits) was that it was psychological. Nonprofits are pressured to keep their Administrative and Fundraising expenses low. They tend to have a gut reaction when they see a percentage that's above 0%. They also tend to think about how much they could raise. When they think of it in very aspirational terms, the % seemed prohibitive.
Of course, I could be wrong on all of this. I've only been doing it for 2 weeks...
Epic quote -
"I’ve never even been to Silicon Valley. I think of Silicon Valley as people in far flung areas of the Roman Empire must have thought of Rome. Surely it’s a mythical land of people who hack apps together in a weekend and sell them for $20 million on Monday."
Wow! Impressive first two weeks. It seems to me that you're doing a lot right here. I like how you sum up your business ("We let nonprofits setup a good-looking, donation-enabled website in about 1-2 minutes."), and if I were a website-less non-profit, I would be very interested.
I clicked over to your site, and your design blew me away. You really build authority with it, but also keep things fun, lighthearted, and modern.
A couple suggestions:
- You might want to test telling people they don't pay you fees after the first X they receive in monthly donations (around $1333, right? maybe make that an even $1000) as opposed to the maximum they pay you in fees. My marketing copywriting intuition tells me that may be clearer / more compelling than people having to do the math themselves. It also gives them a more tangible goal to shoot for and story to tell themselves. ("I'm sure we can get over $X a month, and the service is basically free after that!")
- Possibly test a more prominent mention of Facebook / Twitter integration on the front page (to the point that you don't have to click or mouseover to see it). I have a feeling that these features are pretty important to non-profits, especially ones who aren't savvy enough to have a good web presence yet. I'm not sure - again, probably I would just test it out.
I can definitely relate to the "outskirts of the roman empire" sentiment: I'm also launching a startup in Greenville, SC, and it definitely feels like the "middle of nowhere" in the world of tech startups. I'm curious how many other startups/HN users are around the area.
I hate to be a downer, but I don't think there's any world in which two weeks is enough to make any conclusions. I think you need to give it a serious shot (think months) before you'll be able to objectively assess your business.
I disagree. The most successful entrepreneurs learn quickly and iterate quickly. You usually can learn something in two weeks - even if it's just that certain language you use is unclear or a turn off. And that's a start.
Actually 2 weeks could be enough to gain some information and make quick and necessary changes. The early days of a start-up would be the most unpredictable and if you haven't learned anything in two weeks that you need to change or improve upon then you haven't been monitoring your project carefully. It's not the length of time but the level and intensity of activities you went through that counts the most.
Did you think about your comment for months before you posted it? I think you need to give this article a serious shot (think months) before you'll be able to objectively assess this article.
Just FYI, the I Do Foundation (a service where you can donate to charities that a wedding-couple list) charges 8%
https://www.idofoundation.org/
So your 9.5% is not that far off. When I did my donation to the charity my friends chose, it included a note about the 8% and told me that it's the general rate.
From their site:
"""
Charitable Gift Registry: The percentage listed on the I Do Foundation website for each store is the exact amount that will be donated to charity every time a guest purchases a gift through an I Do Foundation registry link. For example, a $100 purchase from Cooking.com generates $8 for charity. The I Do Foundation does not deduct any fees from these donations. When guests make online donations, an 8% fee is added to their donation. This fee covers the cost we incur from our credit card processing company. For example, when a guest donates $100, an $8 fee will be added.
"""
No doubt that HN rocks. Being a person not living in Valley, even in US I got to know about the things which I really needed to know; business and tech. Though I have not done something "remarkable" yet but I believe in myself that whenever I do, it would be because of things I learnt from HN.
Coming to your product, it's a cool idea and you are definitely targeting a niche which makes it noticeable. One thing which I think successful entrepreneurs don't share that how do they reach their target audience. This is something which every entrepreneur should share by discussing his/her case study.
Somehow, I missed the original HN post, but I like the service as it serves a vastly ignored market (I've also been a fan of Causes since they started).
As far as pricing is concerned, it sounds like it might be best represented on a graph (donations vs. donations less fees).
Also, I'm curious about pointing people to Hover when they want their own domains: is there an affiliate relationship there? I didn't get too far into the 'help' section, but who is going to help with DNS settings? Is that something Bellstrike will provide support for?
We don't have any type of affiliate relationship with Hover. Most of our target market is not super tech savvy and I just think Hover is one of, if not the, easiest to use registrars out there. Right now, nonprofits have to just forward their custom domain to their Bellstrike domain. However, we have plans to implement domain masking. If we do integrate with Hover's API, we could manage their DNS settings for them (if they choose) or just give them good instructions. It's kind of hard to give great instructions on DNS settings to a non tech savvy audience though because every registar is different.
Good post. I can relate to a lot of it after posting my project here on HN a couple weeks ago. (plus it's also a niche website builder)
You didn't ask for any marketing advise but have you considered targeting Christian (or other) missionaries overseas? I have several friends from the US who have moved to Africa or eastern Europe long-term. They are usually sponsored by a US church and qualify as non-profits; but they also rely on recurring support to pay their bills. I think many of them could use something like this.
I'd love to target them. Do you know the best way to do so? I have a feeling it's a pretty fragmented market so it could be difficult to get in front of a large group of them in a single publication, website, or conference.
You are selling a publishing platform, so why use Tumblr? You might want to switch your blog over to your product, you know, eat your own dogfood and all that...
DCaldwell, I agree with you on the limits of the lean start-up philosophy. I think the minimum viable product idea is hyped up immensely and is often an excuse for someone to release a half-finished product and call themselves an entrepreneur.
A minimum brilliant product, on the other hand, is something I could unreservedly support. And I think that is what you have achieved. Well done!
I've known the fine folks behind this project for a while and it's exciting to see them launch and gain some traction. It's great for our area and great for them. Congrats again Dodd and team. Looking forward to see more great stuff coming down the pipe!
Thanks. We're actually setup as a for-profit. But I really want to provide value and help nonprofits out on our blog. I'll probably write a post about how they can use this service with Reddit.
Thanks for being honest about your experiences. It's refreshing to hear some real metrics, even if they aren't the most compelling stats for a launch. Excited to hear more updates in the coming months.
We used the amazing @rogie (twitter handle) for the design of Bellstrike.com and the amazing @squaredeye for 3 of our templates/themes. We iterated on some of their work in house and did some other minor design stuff ourselves.
do you mind sharing how you actually got those hits in the first two weeks? i know with many startups getting the word out after the launch is very hard.
so aside from HN what else did you do to get word out and get even foreign non-profits?
I've actually got a blog post planned for that :) I'd love to get a little more traction so I actually have something to write about though. But a big thing is just that people like to talk about designy stuff on Twitter a lot
[+] [-] patio11|14 years ago|reply
There are numerous Ask HNs about our demographics. Take a look at them. Compare with your domain expertise about people who run non-profits. The differences are fairly dramatic.
You'll never win an argument about pricing with someone who is not in the market for your product anyhow. Their opinions are not relevant. Getting $0 from HN readers will not compromise the success of your business, since there is no pricing strategy which will result in you getting more than $0 from HN readers.
I also think that 9.5% is less than 6% + 3.5% when considered from the perspective of the people whose opinions matter to you making your rent next month. For that matter, I think 10% would also also likely be perceived as less than 6% + 3.5%. In any event, you'll likely be additive on their existing revenue (or the customers will think you are), and 90% of free money is better than 100% of no money every day of the week.
[+] [-] nfm|14 years ago|reply
The cost (time, money, etc) of setting up their own website and processing their own transactions is obviously prohibitive, as most nonprofits don't accept online donations.
Lots of nonprofits also know exactly what percentages of their revenue go towards administration and marketing, so they're likely to have a good comparison point for how much it costs them to receive donations by other means.
[+] [-] dcaldwell|14 years ago|reply
You're correct - we are additive on the nonprofits' existing revenue (other than cases where they would be switching from another service). The problem that I seemed to be encountering in emails from prospective customers (actual nonprofits) was that it was psychological. Nonprofits are pressured to keep their Administrative and Fundraising expenses low. They tend to have a gut reaction when they see a percentage that's above 0%. They also tend to think about how much they could raise. When they think of it in very aspirational terms, the % seemed prohibitive.
Of course, I could be wrong on all of this. I've only been doing it for 2 weeks...
[+] [-] sandieman|14 years ago|reply
[+] [-] kariatx|14 years ago|reply
I clicked over to your site, and your design blew me away. You really build authority with it, but also keep things fun, lighthearted, and modern.
A couple suggestions:
- You might want to test telling people they don't pay you fees after the first X they receive in monthly donations (around $1333, right? maybe make that an even $1000) as opposed to the maximum they pay you in fees. My marketing copywriting intuition tells me that may be clearer / more compelling than people having to do the math themselves. It also gives them a more tangible goal to shoot for and story to tell themselves. ("I'm sure we can get over $X a month, and the service is basically free after that!")
- Possibly test a more prominent mention of Facebook / Twitter integration on the front page (to the point that you don't have to click or mouseover to see it). I have a feeling that these features are pretty important to non-profits, especially ones who aren't savvy enough to have a good web presence yet. I'm not sure - again, probably I would just test it out.
[+] [-] dcaldwell|14 years ago|reply
[+] [-] j_col|14 years ago|reply
[+] [-] dcaldwell|14 years ago|reply
[+] [-] ralphsaunders|14 years ago|reply
[+] [-] StrawberryFrog|14 years ago|reply
[+] [-] thorstadt|14 years ago|reply
[+] [-] mcrittenden|14 years ago|reply
[+] [-] dcaldwell|14 years ago|reply
[+] [-] SeoxyS|14 years ago|reply
[+] [-] kariatx|14 years ago|reply
[+] [-] EREFUNDO|14 years ago|reply
[+] [-] masondesu|14 years ago|reply
[+] [-] civilian|14 years ago|reply
So your 9.5% is not that far off. When I did my donation to the charity my friends chose, it included a note about the 8% and told me that it's the general rate.
From their site: """
Charitable Gift Registry: The percentage listed on the I Do Foundation website for each store is the exact amount that will be donated to charity every time a guest purchases a gift through an I Do Foundation registry link. For example, a $100 purchase from Cooking.com generates $8 for charity. The I Do Foundation does not deduct any fees from these donations. When guests make online donations, an 8% fee is added to their donation. This fee covers the cost we incur from our credit card processing company. For example, when a guest donates $100, an $8 fee will be added. """
[+] [-] pknerd|14 years ago|reply
Coming to your product, it's a cool idea and you are definitely targeting a niche which makes it noticeable. One thing which I think successful entrepreneurs don't share that how do they reach their target audience. This is something which every entrepreneur should share by discussing his/her case study.
[+] [-] 18pfsmt|14 years ago|reply
As far as pricing is concerned, it sounds like it might be best represented on a graph (donations vs. donations less fees).
Also, I'm curious about pointing people to Hover when they want their own domains: is there an affiliate relationship there? I didn't get too far into the 'help' section, but who is going to help with DNS settings? Is that something Bellstrike will provide support for?
[+] [-] dcaldwell|14 years ago|reply
[+] [-] callmeed|14 years ago|reply
You didn't ask for any marketing advise but have you considered targeting Christian (or other) missionaries overseas? I have several friends from the US who have moved to Africa or eastern Europe long-term. They are usually sponsored by a US church and qualify as non-profits; but they also rely on recurring support to pay their bills. I think many of them could use something like this.
Well done.
[+] [-] dcaldwell|14 years ago|reply
[+] [-] laconian|14 years ago|reply
[+] [-] alexkearns|14 years ago|reply
A minimum brilliant product, on the other hand, is something I could unreservedly support. And I think that is what you have achieved. Well done!
[+] [-] cannuk|14 years ago|reply
[+] [-] Valien|14 years ago|reply
[+] [-] citricsquid|14 years ago|reply
[+] [-] dcaldwell|14 years ago|reply
[+] [-] masondesu|14 years ago|reply
[+] [-] bambax|14 years ago|reply
The site's design is indeed impeccable; did you do it yourself or did you use a service provider of some kind?
[+] [-] dcaldwell|14 years ago|reply
[+] [-] _ud4a|14 years ago|reply
so aside from HN what else did you do to get word out and get even foreign non-profits?
[+] [-] dcaldwell|14 years ago|reply