23 rules to run a software startup with minimum hassle

There’s a lot to agree/disagree with in this article:

The important thing to remember is the “with minimum hassle” clause in the title!

5 Likes

I think everyone should follow every single one of these rules to the letter.

I also think everyone should do the opposite of all of the rules, and measure the difference.

In short: this blog article is useful not because of its conclusions, but because of the opportunities it suggests.

Have any of you tried Paddle? I’m using stripe but it can be interesting to not have to handle subscriptions and have less bookkeeping.

Less money but less stress :sweat_smile:

I have used them for one of my apps, that I sold a few years ago. Two words: they’re great. For me it was worth having a complete billing system at the markup they charged on each transaction.

They also took away a lot of the VAT related complexity as they just pay one amount every month (= less accounting costs).

2 Likes

Did you use Paddle with subscriptions?

No, just one off license sales. But given how smooth everything worked I would use them for subscription billing as well.

Rule #5. Don’t do freemium.
Guys do you agree with it? I don’t use freemium yet but I really want to try. IMO freemium allowes to sell products better where the product value is not clear for users from the start. I guess there are signs for such things. For example we have poor conversion rate, but big percentage of users pay regularly for upgrades.

Rule #16. Don’t do partnerships.
When you are small It is hard to resist. We have many, maybe dozens of different partnerships. But only 2-3 were really fruitful and beneficial. But you cannot reject reseller requests when you desperately need sales.

Rule #10: Use an answering service
Does anybody have a good experience with such services? Would be nice because we are not in US time zones.

Don’t reject a sale via them - but don’t mistake it for some partnership and give discount. https://successfulsoftware.net/2009/03/18/the-two-types-of-reseller/

Sometimes it is not easy. Imagine a big company says they are a distributor with more than 10000 resellers and they arrange Skype/zoom conference with you and talk about how they are interested in promoting your software in their country. And all they need is a huge discount because they are distributor and use 3 tier scheme. So they get their discount and nothing big happens at the end. :grimacing:

I think it’s impossible to give a hard and fast rule on freemium. It depends on product (B2B vs B2C, How long until customers see value, can the customer onboard themselves, how much value can you provide until they pay, etc). For my B2B app, instead of a free plan, I decided to have a very cheap but functional entry level plan. If a company can’t spare $30/month to try the platform (no lockin, easy to cancel, etc) I do not want to deal with support questions and other complaints from non-paying customers. YMMV.

1 Like

I use Paddle.

The first thing to realise is that you can’t compare Paddle with Stripe, they’re in different categories.

Stripe and Braintree are Payment Gateways. They let you get money from credit cards and leave the rest to you, including retries, charge backs, VAT and invoices. The customer buys directly from you.

Paddle and FastSpring are Merchants of Record. They resell your product and handle everything including taxes and invoices and you get one wire transfer once a month with your earnings, minus their cut. You don’t have any customers, they do.

Frankly, I don’t see why anyone running a SaaS business would consider Stripe, it’s just so much more work. My friend says his developer team spent two months setting everything up. Having said that if you’re in a non-SaaS business you probably don’t have much choice. There is also FastSpring, companies like Ahrefs use them, they’re more serious than Paddle (Paddle is infamous for banning people by accident and then taking weeks to reply to emails).

Happy to answer any more questions you might have.

3 Likes

Right now, I am having to decide between PayPal, 2Checkout and other options to sell subscriptions of a new software we are working on. I’ve never used them and I think what you say about Paddle sounds like 2Checkout.

This page is saying PayPal is the best option for selling SaaS. But it’s not a reseller:

I would love to know other people’s views.

We are using Paywhirl and are very happy with it.

1 Like

Paddle is really the best option, specially if you intend on selling to EU customers. Good luck with VAT returns which are different for every EU country in terms of percentage and rules. It not only saves you dev time and constant research time (since laws do change) but legal problems down the road.

(I have a great link about all this but since this is my first post I can’t put links… I will edit this post later)

1 Like

@pier you should now be able to post links. I’m curious, so wanna share that link?

Also recommending Paddle - they handle everything for you, and easy to set up. Still haven’t faced with any issues regarding accidental bans of users.

@SteveMcLeod

1 Like