I tried to use it for a new SaaS product - but their plans start at 3000$/mo.
It seems like they have things backwards. The small fry like me don't want to self-host, we want a managed solution. The big fishes have enough scale to self-host.
I see your point, but I think this might work for them. At my previous place we started on Stripe it was really nice to work with, cost nothing in absolute terms because we had few sales, easy to integrate.
But a few years in we were doing substantial volume and we wanted to re-negotiate the contract. If we had Lago and could re-integrate with that, using it as leverage on a Stripe contract renewal, that could have been worth $3k a month, given that we were paying Stripe $30k per month in fees.
Our situation was a little different being retail rather than SaaS billing, but I could see a world where this makes financial sense.
Got trapped by the same thing. Usage based billing is a huge pain point for us we were really excited by lago but dont want to self host infra if we can outsource it.
We ended up talking to about 5 different usage based billing API providers and basically no one is interested in servicing the sub $1000 per month market which is where we will realistically be for the next year as we grow.
Additionally lago and other providers advertise "no revenue cut" and then always quote pricing as a percentage of revenue (which is technical not a revenue cut except your fee scales pretty linarly with revenue).
This suggests their target customer are the Stripe whales spending more than $3000 a month on fees.
It's pricing genius to avoid the small, expensive to service, unprofitable customers (let Stripe lose money on those), and then they cherry pick the good customers once that have already scaled up at Stripe
What's a fair price for a budget-friendly hosted version? Lower upfront cost, or maybe a revenue share? We've aimed at enterprise deals for the paid edition, keeping the open-source version widely accessible. Keen to hear your thoughts on adjusting our pricing.
Selling to developers is where i know it will struggle... Developers are cheap ass and would rather build it themselves at 10x the opportunity cost. And the moment it attempts to monetise itself in some form, there'll be a massive "betrayal" exodus a la Redis.
Usage based billing is tough. I took a long hard look at lago and ultimately it wasn't for me (B2C API based business). I couldn't do without the customer portal which is a premium feature, and premium was at least $1,500 USD/month. My revenue couldn't justify this. To Lago's credit, they are purposefully staying away from percentage pricing. So they have to charge a lot on the base price. Stripe Billing charges a percentage and guess what, with a growing business it's only a matter of time before your Stripe bill tops that $1.5k.
I also looked at Stripe Billing for usage-based and it didn't meet my requirements either. (though I am using Stripe Billing with flat charges).
My exact use case is:
- I want to sell API credits upfront including for subscriptions (i.e. user signs up for $10/month of credits, they pay $10 upfront, and can spend $10 worth of credits). Stripe billing doesn't support charging upfront, for usage-based, they only bill after the billing period is finished. Some of my users have been gaming the system, canceling and not paying so that doesn't work for me. I believe Lago did support billing upfront.
- I want to freely mix subscription based and pre-paid credits. My users go over their quota one month, they don't want to upgrade their subscription to the highest tier, they prefer a one-off top-up. I need to control over which credit gets consumed first. Stripe billing and Lago both had issues with this, I can't remember exactly what.
- I wanted to support as many payment methods as possible, and particularly Chinese wallets for pre-paid credits (Alipay, Wechat). Lago has no plans to implement this, I was half considering implementing it myself inside Lago. I don't think Wechat and Alipay will matter much for B2B businesses.
- I'm also a huge fan of massively regression tested code, and Stripe Billing with its test clocks blows Lago out of the water here. Lago has no ability to walk the clock forward for subscription lifecycle testing. Though maybe this matters less if you have faith in the product, you can just expect to get the right callbacks on time.
I did notice that the Lago devs on slack took time to answer questions down to the deepest technical level. If I was running a B2B startup, I would probably try really hard to fit Lago in the picture, particularly at at time when stories of Stripe account bans are so prominent.
Typical mind fallacy. I personally love paying for things that save me time, and I'm also a developer.
Also, this is kind of their thesis, isn't it? That developers want open-source software to do their billing, which they can modify themselves if they need certain features instead of relying on a proprietary provider like Stripe. Doesn't sound too outlandish to me.
I am not a cheap-ass developer. I believe that thinking economically is a fundamental facet of engineering, and if you are not thinking economically, you may be doing something, but it’s not engineering. Like the sibling commenter, I am delighted to pay for something that brings value and saves time. Not like I ever considered building my own billing system, anyway…
Maybe I’m old and my feeling for what open-source means haven’t adapted to the changing reality, but whenever I see “open-source” and “$22 in funding” in one sentence I immediately think “open-source my ass”.
Is there a guide somewhere about how someone’s supposed to create open source software without monetizing it? Or is it just the VC money that makes it not real open source?
I’ve seen this sentiment a lot, especially from OSS veterans like rich harris (who ironically now gets his paycheck from VC money). On one hand I want to complain about it too and say that people should only build open software for the love of building and sharing, but on the other hand it costs a lot of money to exist in meat space and it seems counterproductive and unfair to expect people to build software I find useful (and most likely even profit off of myself) on nights and weekends and get paid in GitHub stars.
I agree with you, but at the same time what's the alternative? Build it anyway on free time, beg for scraps in donations, and have $corporate sell it as a service while giving nothing back?
I don't understand the benefit of OSS in Lago's context other than PR/developer goodwill.
It's a catch-22 when building in open source nowadays, so if this is the future of it with the benefit of things having better longevity and support, so be it.
Correct me if I’m wrong but isn’t this how suse, red hat, databricks etc work? They offer useful open source tools and make money to sustain development by offering service around those tools.
I could be totally wrong but that is my understanding of some of these projects.
It means "open source until their VCs ramp up the pressure to monetize and they switch to a more restrictive license, screwing over all existing contributors and the rest of the community."
"open source my ass" :)) I don't want to argue with the ass/the gut, but perhaps I can offer an explanation as to why it might feel this way.
When open source started in the mid-70s, the ethos was: give software away for free. Money came in the form of university or corporate research grants, there was no business model. Only in 1998, the money came into picture once RedHat, MySQL, and many others started doing paid support and services on top of free software. And starting mid 2000s it became common to think about making money with open source, and that's because of cloud computing. In SaaS, the user does not know or care if there is open source or proprietary software under the hood, so it leveled up OSS, put it in the same game as the rest.
Why VCs like open source? (I'm a former ML engineer turned in-vest-er), well some of it is nostalgia in my case, I used awesome OSS software while in university like spaCy and i share the same values of community, transprency, giving back etc, and some of it is related to what the job of a VC is - makin' money.
In closed source companies, one invests a lot into sales and marketing. Developers generally don't like to be sold, they can't be sold they have to choose you/your product. So if a company manages to win the hearts and minds of developers, they will pull your software in to be evaluated by procurement for purchasing without spending millions in sales and marketing, it's more efficient as a business model. It's also a lot more defensible. Big corp can pur money into suits to sell their products, but you can't buy developer love, for that you need amazing DX and good dev rel. But making money in OSS is a lot harder than in SaaS. in SaaS people talk about product-market fit (find 5+ customers who use the same way, buy the same way, get the same thing out of the product - predictability so the VC gives money and scales sales). In OSS you've got the problem 3x: you gotta get to project-community fit (you measure GitHub Stars), then product-market fit (you measure downloads) and then value-market fit (you measure revenue, and the buyer might not be the same as the developer/user). Most amazing OSS products fail at the value market-fit section.
Most founders of OSS companies fail to extract value. Some of it is because it's so hard or because people feel like OSS should be "free software" that they postpone monetization. And then when they start to monetize it's too late. would you buy a cow if you've been getting the milk for free for years? The other reason they fail is they don't know how to do it. The typical 3 ways to make money with OSS are: support (you sell support and services -e.g. RedHat), open core (you sell propritary functionality - e.g. confluent, elastic) and SaaS (you sell hosting, tooling - e.g. databricks).
One simple way to think about it, based on the successful OSS companies I've see in, the free version of the product should have everything, all the bells and whistles that a single developer needs to get the job done. and the paid product has the extra features that are needed to get the job done as a team.
I love open source software and it pains me to see super smart founders and so many contributor put so much of their passion into building it but failing to scale it, commercial helps there, and failing to get rewarded for the hard work. But it's darn hard, it's like going against your nature, if you contribute to OSS and build OSS you care about community and want to give it for free. So making money with it, just thinking about it, makes you uncomfortable. And when people are uncomfrtable, they go do what they know, where their comfort is, and that is coding for most engineers. And that's how you end up with awsome OSS software with lots of cool features and a founder who postpones monetization so much for so long than at some point it passes the point of no return and that's how another promissing company dies, nobody wants to invest if they can't get their money back even if the product is really really cool.
Tracking the edge cases around recurring payments, invoicing, pro-rated tier changes, and metered billing is hard! And Stripe Billing APIs aren’t the most fluent for many cases. It’s good to see new layers in the space.
Actually, PCI Compliance is largely a solved problem. Use something like https://verygoodsecurity.com and wrap the proxy around Lago and your self hosting will qualify you for the easiest PCI compliance tier.
(Disclosure: I founded Very Good Security & was the CEO for 8 years).
Completely agree, bad track record and/or explained by help from the EU. Not saying that EU promotions are bad but that there are not enough hungry entrepreneurs in Europe which is easy to explain by the great life standard there. This is the paradox.
On the other hand there are counterexamples about great intentions coming up from France. For example, Semmle [1] which was acquired by GitHub for performing static analysis over the repository. Inria [2] is great but the problem is not research but how to compete at the business level with American-like companies.
> I'd never thought I'd see Meme-ification of technical docs.... oh god
I guess you entered the industry after 2015? Even the most technical analysis like the Jepsen Reports which evaluated the technical claims of Cassandra DB etc used lots of memes between the technical bits. Presentations always had cat/dog pictures in them etc.
Anyone have an actual Stripe Payments alternative? I'm stuck on PayPal since Stripe doesn't want to work with us, only with our closed source competition.
We are starting with billing indeed, with a long term vision of becoming the « open revenue hub » (laid out the high level steps here: https://www.getlago.com/blog/lago-raises-22-millions), meaning we want to offer an open alternative to everything RevOps. Instead of choosing to be in a closed source ecosystem like Stripe’s (they have 21 products and most founders don’t realise they are using 3-6 of them, not only « Stripe payments », each of them usually taking a cut on revenue), you could build a customised stack, in a « best of breed » approach, and add the long tail of tools/use cases/home-grown system if you’d like.
We're diving first into creating an alternative to one of Stripe's key services which is billing. We especially building billing on areas where Stripe struggles, like mixed or usage-based billing models.
Can you please explain, why the ruby engineer vacancy is remote only within certain countries - FR, PT, GB, NL, ET, and IT? Why if I live in Latvia or Poland, or Sweden, I can't work with you? I don't want to call you out, but it's just interesting to understand why it's like that and specifically, why we can't try to make the geography more diverse, at least within EU?
Not from Lago, but from my own experience I'd guess it's due to the requirements to set up payroll in different countries. If you hire someone, even as a remote worker, in a particular country, you need a payroll processor to make sure the employee is paid with the correct tax deductions, pay those taxes to the local government, and so on. You also need to make sure that you comply with local labour laws. Doing all of that is far from trivial, so there's a high cost to taking on your first employee in any given country.
Intuitively you might think that the EU, with all of the freedom of movement laws, might make this unnecessary, but it doesn't. At least as far as I know, it's no easier for (say) a German company to hire someone in Italy that is is for them to hire someone in Japan.
Because it isn't worth it for a company to set up a new registered entity, find a payroll processor and deal with a whole set of federal/state/local employment laws and tax laws just for a single employee.
Totally agree, thanks for the feedback.
We are working on extending the geos to EU+UK. We have been a lean team so far so we had to « keep it simple to focus on the product and the community » but we have just hired someone fantastic on the Talent & People side, who will be able to improve this.
Meanwhile feel free to email talent@getlago.com for any Qs!
ELI5: what is the value proposition for Lago? That is open-source?
I am not a Stripe customer but I interacted with it as a normal user (e.g. KYC) and was impressed by their UX/UI, an area where open source projects doesn't excel at all. UX/UI is really hard to grasp.
Stripe customers look for a strong finance platform, they don't care if it's open source or not. Also, from the business perspective you need to have a hard drive to manage a company like this.
We're diving into creating an alternative to one of Stripe's key services which is billing. Especially focusing on areas where Stripe struggles, like mixed or usage-based billing models. We do offer a great UI/UX ;)
plantain|1 year ago
It seems like they have things backwards. The small fry like me don't want to self-host, we want a managed solution. The big fishes have enough scale to self-host.
danpalmer|1 year ago
But a few years in we were doing substantial volume and we wanted to re-negotiate the contract. If we had Lago and could re-integrate with that, using it as leverage on a Stripe contract renewal, that could have been worth $3k a month, given that we were paying Stripe $30k per month in fees.
Our situation was a little different being retail rather than SaaS billing, but I could see a world where this makes financial sense.
redslazer|1 year ago
We ended up talking to about 5 different usage based billing API providers and basically no one is interested in servicing the sub $1000 per month market which is where we will realistically be for the next year as we grow.
Additionally lago and other providers advertise "no revenue cut" and then always quote pricing as a percentage of revenue (which is technical not a revenue cut except your fee scales pretty linarly with revenue).
boudin|1 year ago
paulsutter|1 year ago
It's pricing genius to avoid the small, expensive to service, unprofitable customers (let Stripe lose money on those), and then they cherry pick the good customers once that have already scaled up at Stripe
quartesixte|1 year ago
Rafsark|1 year ago
true_religion|1 year ago
They have open source / no support billing, so why wouldn't use use that? They also have an up to 50% discount for early-stage companies.
throwawaymanbot|1 year ago
[deleted]
darylteo|1 year ago
I know, cuz I am one.
lucw|1 year ago
I also looked at Stripe Billing for usage-based and it didn't meet my requirements either. (though I am using Stripe Billing with flat charges).
My exact use case is:
- I want to sell API credits upfront including for subscriptions (i.e. user signs up for $10/month of credits, they pay $10 upfront, and can spend $10 worth of credits). Stripe billing doesn't support charging upfront, for usage-based, they only bill after the billing period is finished. Some of my users have been gaming the system, canceling and not paying so that doesn't work for me. I believe Lago did support billing upfront.
- I want to freely mix subscription based and pre-paid credits. My users go over their quota one month, they don't want to upgrade their subscription to the highest tier, they prefer a one-off top-up. I need to control over which credit gets consumed first. Stripe billing and Lago both had issues with this, I can't remember exactly what.
- I wanted to support as many payment methods as possible, and particularly Chinese wallets for pre-paid credits (Alipay, Wechat). Lago has no plans to implement this, I was half considering implementing it myself inside Lago. I don't think Wechat and Alipay will matter much for B2B businesses.
- I'm also a huge fan of massively regression tested code, and Stripe Billing with its test clocks blows Lago out of the water here. Lago has no ability to walk the clock forward for subscription lifecycle testing. Though maybe this matters less if you have faith in the product, you can just expect to get the right callbacks on time.
I did notice that the Lago devs on slack took time to answer questions down to the deepest technical level. If I was running a B2B startup, I would probably try really hard to fit Lago in the picture, particularly at at time when stories of Stripe account bans are so prominent.
n2d4|1 year ago
Also, this is kind of their thesis, isn't it? That developers want open-source software to do their billing, which they can modify themselves if they need certain features instead of relying on a proprietary provider like Stripe. Doesn't sound too outlandish to me.
aerhardt|1 year ago
baxtr|1 year ago
ku1ik|1 year ago
gigatree|1 year ago
I’ve seen this sentiment a lot, especially from OSS veterans like rich harris (who ironically now gets his paycheck from VC money). On one hand I want to complain about it too and say that people should only build open software for the love of building and sharing, but on the other hand it costs a lot of money to exist in meat space and it seems counterproductive and unfair to expect people to build software I find useful (and most likely even profit off of myself) on nights and weekends and get paid in GitHub stars.
TheCapeGreek|1 year ago
I don't understand the benefit of OSS in Lago's context other than PR/developer goodwill.
It's a catch-22 when building in open source nowadays, so if this is the future of it with the benefit of things having better longevity and support, so be it.
code_runner|1 year ago
I could be totally wrong but that is my understanding of some of these projects.
paxys|1 year ago
donnaoana|1 year ago
When open source started in the mid-70s, the ethos was: give software away for free. Money came in the form of university or corporate research grants, there was no business model. Only in 1998, the money came into picture once RedHat, MySQL, and many others started doing paid support and services on top of free software. And starting mid 2000s it became common to think about making money with open source, and that's because of cloud computing. In SaaS, the user does not know or care if there is open source or proprietary software under the hood, so it leveled up OSS, put it in the same game as the rest.
Why VCs like open source? (I'm a former ML engineer turned in-vest-er), well some of it is nostalgia in my case, I used awesome OSS software while in university like spaCy and i share the same values of community, transprency, giving back etc, and some of it is related to what the job of a VC is - makin' money.
In closed source companies, one invests a lot into sales and marketing. Developers generally don't like to be sold, they can't be sold they have to choose you/your product. So if a company manages to win the hearts and minds of developers, they will pull your software in to be evaluated by procurement for purchasing without spending millions in sales and marketing, it's more efficient as a business model. It's also a lot more defensible. Big corp can pur money into suits to sell their products, but you can't buy developer love, for that you need amazing DX and good dev rel. But making money in OSS is a lot harder than in SaaS. in SaaS people talk about product-market fit (find 5+ customers who use the same way, buy the same way, get the same thing out of the product - predictability so the VC gives money and scales sales). In OSS you've got the problem 3x: you gotta get to project-community fit (you measure GitHub Stars), then product-market fit (you measure downloads) and then value-market fit (you measure revenue, and the buyer might not be the same as the developer/user). Most amazing OSS products fail at the value market-fit section.
Most founders of OSS companies fail to extract value. Some of it is because it's so hard or because people feel like OSS should be "free software" that they postpone monetization. And then when they start to monetize it's too late. would you buy a cow if you've been getting the milk for free for years? The other reason they fail is they don't know how to do it. The typical 3 ways to make money with OSS are: support (you sell support and services -e.g. RedHat), open core (you sell propritary functionality - e.g. confluent, elastic) and SaaS (you sell hosting, tooling - e.g. databricks).
One simple way to think about it, based on the successful OSS companies I've see in, the free version of the product should have everything, all the bells and whistles that a single developer needs to get the job done. and the paid product has the extra features that are needed to get the job done as a team.
I love open source software and it pains me to see super smart founders and so many contributor put so much of their passion into building it but failing to scale it, commercial helps there, and failing to get rewarded for the hard work. But it's darn hard, it's like going against your nature, if you contribute to OSS and build OSS you care about community and want to give it for free. So making money with it, just thinking about it, makes you uncomfortable. And when people are uncomfrtable, they go do what they know, where their comfort is, and that is coding for most engineers. And that's how you end up with awsome OSS software with lots of cool features and a founder who postpones monetization so much for so long than at some point it passes the point of no return and that's how another promissing company dies, nobody wants to invest if they can't get their money back even if the product is really really cool.
mvkel|1 year ago
Having to maintain my own payments stack (and PCI compliance) sounds like a massive distraction.
btown|1 year ago
Tracking the edge cases around recurring payments, invoicing, pro-rated tier changes, and metered billing is hard! And Stripe Billing APIs aren’t the most fluent for many cases. It’s good to see new layers in the space.
mahmoudimus|1 year ago
(Disclosure: I founded Very Good Security & was the CEO for 8 years).
hanniabu|1 year ago
giorgioz|1 year ago
Lago is written in Ruby.
I found few other open source billing systems written in Java.
Anyone knows anything written in nodeJS?
Alifatisk|1 year ago
derekperkins|1 year ago
globalise83|1 year ago
wslh|1 year ago
On the other hand there are counterexamples about great intentions coming up from France. For example, Semmle [1] which was acquired by GitHub for performing static analysis over the repository. Inria [2] is great but the problem is not research but how to compete at the business level with American-like companies.
[1] https://en.wikipedia.org/wiki/Semmle
[2] https://www.inria.fr/en
abledon|1 year ago
https://github.com/getlago/lago
https://imgur.com/a/gsrhUXm
I'd never thought I'd see Meme-ification of technical docs.... oh god
ffsm8|1 year ago
I guess you entered the industry after 2015? Even the most technical analysis like the Jepsen Reports which evaluated the technical claims of Cassandra DB etc used lots of memes between the technical bits. Presentations always had cat/dog pictures in them etc.
tamimio|1 year ago
They always been, in different forms. I am glad to see them too, harmless and signal IQ/EQ, taking anything too seriously is not a good thing.
triyambakam|1 year ago
grzeshru|1 year ago
dotancohen|1 year ago
Rafsark|1 year ago
djbusby|1 year ago
angulardragon03|1 year ago
(Disclaimer - I work there)
kennydude|1 year ago
jbverschoor|1 year ago
Billing, invoicing, payments, entitlements, subscriptions.
All different things.
AnhTho_FR|1 year ago
mooreds|1 year ago
7M was seed, raised in 2023 according to crunch base.
Sounds like they aren't trying to be an entire stripe replacement (from the last paragraph of the linked article).
Anyway an interesting story of a successful startup pivot starring a passionate HN post.
Rafsark|1 year ago
mib32|1 year ago
https://www.ycombinator.com/companies/lago/jobs/RvvzKuM-sr-b...
gpjt|1 year ago
Intuitively you might think that the EU, with all of the freedom of movement laws, might make this unnecessary, but it doesn't. At least as far as I know, it's no easier for (say) a German company to hire someone in Italy that is is for them to hire someone in Japan.
paxys|1 year ago
AnhTho_FR|1 year ago
baxtr|1 year ago
https://news.ycombinator.com/item?id=31424450
wslh|1 year ago
I am not a Stripe customer but I interacted with it as a normal user (e.g. KYC) and was impressed by their UX/UI, an area where open source projects doesn't excel at all. UX/UI is really hard to grasp.
Stripe customers look for a strong finance platform, they don't care if it's open source or not. Also, from the business perspective you need to have a hard drive to manage a company like this.
Rafsark|1 year ago
AnhTho_FR|1 year ago
Yes we’d love feedback on our UX/UI as well!
cheema33|1 year ago
unknown|1 year ago
[deleted]
w-ll|1 year ago
jpcapdevila|1 year ago
Event-based: if you can track it, you can charge for it;
I see this being useful for usage based pricing.
joe_guy|1 year ago
unknown|1 year ago
[deleted]
unknown|1 year ago
[deleted]
azophy_2|1 year ago
AnhTho_FR|1 year ago
szundi|1 year ago