5 ms·

Spreedly doubles pricing.

53 points by happyfeet 15y ago

arctangent 15y ago
I'm very surprised they haven't chosen to "grandfather" existing customers, so that they can remain on the previous pricing model.
- happyfeet 15y ago
  True. They have proposed to "grandfather" the current plans only upto 90 days so customers to migrate elsewhere, if they opt to.
  - eps 15y ago
    And this probably means that they did the numbers and whatever they are going to loose with those who leaves will be offset be increased fees paid by those who sticks around.
happyfeet 15y ago
It is surprising to see this coming from Spreedly, especially in the context of their previous discussion on the same topic in HN (when Chargify increased price). When you price a subscription product, one should factor in long term sustainability at that price, for a long time. Any price increase due to additional features / facilities you provide - say 24*7 on-call support, must not be burdened on your existing users. Provide a way for existing users to "opt" for those at a higher price, but leave them at the current price as they stand.
- bigiain 15y ago
  "It is surprising to see this coming from Spreedly" Really? A relative newcomer to e online payments space, undercutting the status quo pricing of the incumbents, suddenly finding they've underestimated the costs of running their service? Doesn't surprise me at all... If I were building a new business based on any of the new online payment services, especially if they're significantly less expensive than traditional merchant accounts or PayPal, I'd be treating it as a short term windfall until they discover the hidden costs they're not charging you for. If they're _very_ lucky, maybe they've got some brand new fraud prevention technology that means the genuinely have lower running costs than PayPal or Visa, but I wouldn't bet _my_ business on it.
  - karamazov 15y ago
    This is a great point - their choice may very well have been between raising prices and shutting down.
  - ntalbott 15y ago
    This makes me chuckle - the funny thing is that we were actually the first "small business" subscription service - Chargify, Recurly, etc., all launched well after us. That said, it also meant we didn't have any point of reference when we initially set pricing. I think we actually did surprisingly well four (4!) years ago, given the lack of information we were working with.
veyron 15y ago
If it is so sticky, why don't people sign up for multiyear contracts for recurring billing services with some sort of price guarantee?
- MicahWedemeyer 15y ago
  AFAIK, none of the providers offer such a thing. A nice, idea, though.
- ntalbott 15y ago
  Think businesses would bite? Month-to-month, no minimum, cancel any time is so much in vogue, it's hard to imagine there would be much traction around a multi-year contract, but maybe I'm wrong.
  - veyron 15y ago
    I would sign up, if that's any consolation :) More generally, it's one of those things that you don't want to change if it works well. Maybe the best model is an short term contract (e.g. 3 or 6 months) which can roll into a multiyear contract.
patio11 15y ago
My monthly Spreedly bill went up by approximately the amount I spent on AdWords between 9 AM and 3 PM on Friday. I know pricing discussions generate a lot of heat, but honestly, $30 is not a lot of money. Nor does it magically become a lot of money after you have 500 customers, at which point you have very high-class problems. Here, let me extend that graph with one extra line: http://images1.bingocardcreator.com/blog-images/hn/spreedly-price-change.png http://images1.bingocardcreator.com/blog-images/hn/spreedly-... This subject seems tailor-made to solicit opinions from pathological customers who are not likely to be either good customers for Spreedly or successful at selling many accounts, totally regardless of whether Spreedly costs $5, $50, or $500 a month.
- mark_l_watson 15y ago
  Yes, what you just said. I don't use Spreedly, but it is a similar case with the AppEngine pricing: I want providers to charge a fair price and keep providing services. Also, same as AWS: I have customers who grumble some on their monthly bills, but providers need to charge a fair market price.
- happyfeet 15y ago
  You are right. This is true for businesses with substantial number of customers. It is a significant difference for those starting up with small customer base (10 or 20) to pay from $23 earlier to $53.
  - mikeryan 15y ago
    I realize that there's many HN Members who may be trying to start a company in 3rd world countries where $30 is a significant chunk of change, and this may sound harsh. But if your business, at any point, can't absorb a $30 a month increase in fees for something as important as your subscription billing system then something is wrong.
    - ohashi 15y ago
      I am not really sure it's the price change that is most offensive. It's the fact they were willing to do it without regard for their current customers. I don't want to deal with a company that is happy to change their price whenever they feel like it and I get the short end of the stick.
MichaelApproved 15y ago
Sure, users can export and migrate, but that costs time and money to do. Code must be updated to work with the new provider and other projects would be put on hold.
- patio11 15y ago
  Exactly. If your engineering costs swamp $30 -- and they do -- this announcement is a total non-event for you.
  - MichaelApproved 15y ago
    Sure $30 may not be a big deal but what's going to happen next time? And the time after that? What a terrible situation to be in. I sign up for a product, in part based on their pricing, and they bump up the cost knowing it'll be too expensive for me to move. If this happened to me, it might be too expensive for me to move an existing product away from them but it'll definitely keep me from putting another project on the platform. For the record, I'm using Recurly, so I'm talking directly from the point of view of an existing and paying customer.
Silhouette 15y ago
I think those suggesting that this is an insignificant rise are missing the point. These subscription billing services have close to the most powerful lock-in imaginable on your business. When you commit to one, you are trusting them with a vital part of your operations. At best, switching later is going to be disruptive to your business and potentially damaging to your customer relations. This is the third of the most well-known recurring billing services to sharply increase prices in the not-so-distant past, after Recurly and then Chargify. In each case, that suggests they have either screwed up their projections so much that they had to grab extra money or deliberately screwed their customers over by dramatically increasing costs when they have an all-but-captive audience. Either way, that is a serious black mark against an organisation that's asking you to trust them with something as important as your payment processing, particularly when those organisations are already relatively tiny compared to most payment-related services and therefore inherently risky to build on anyway. BTW, blog posts from these services about how they are just trying to find a sustainable business model and hope their customers will understand aren't exactly reassuring. If they could get things so badly wrong before, why should we trust that they are doing any better now and won't see another rise next year? This isn't newsworthy because of the amounts involved. It's newsworthy because it reflects on the competence of these payment services and illustrates a dangerous trend.
- olefoo 15y ago
  Or it could be that all three of these subscription billing companies got shafted by their correspondent banks...
  - lclarkmichalek 15y ago
    Not likely for spreedly, as you have to provide your own payment gateway i.e. paypal.
  - timharding 15y ago
    None of these guys pay the banks. Their customers are already paying a for payment gateway for that service, they sit on top providing recurring billing and subscription management.
timharding 15y ago
It's not so much the rise in monthly fixed costs that's the problem. It's the doubling of per transaction pricing (that will just sting month after month) and the lack of features compared to now cheaper competition. Recurly at 10c vs. Spreedly at 40c.
primigenus 15y ago
Last year here on HN, Nathaniel said this: "The ridiculously huge mistake I think Chargify made here was something I thought was just a given these days: they should've unilaterally grandfathered all of their existing clients, and quietly given the grandfathered plan to anyone who was already integrating but not yet launched as well." (http://news.ycombinator.com/item?id=1781104 http://news.ycombinator.com/item?id=1781104) It's one thing to trash your competitor publically. It's another to then do the exact same thing you were complaining about one year later. This isn't about the numbers - $30 is jack squat. This is about principles. With this decision, Spreedly shows that they can say one thing and then do the exact opposite. And that's troubling.
- ntalbott 15y ago
  One learns a lot in a year. I said some things then that I wish I'd had more experience to back up; if I had, I probably would have tempered them more. That said, I also said this: "Even if you absolutely have to raise prices across the board, I think three months of warning is the absolute minimum amount of time to give a customer base before you hit them with the increase." We're doing that, with a unilateral offer to grandfather customers for 90 days. In general, I still think grandfathering is best when possible, but when you realize your business isn't growable (and barely sustainable) at current prices then something's gotta give. We've put this price raise off too long, hoping to soften it with new features, etc., but it's a chicken and egg problem. We can't do what needs to be done without the resources to do it. So prices have gone up, and it's the next day and we're in a better spot to help all our (remaining) customers rock.
  - ohashi 15y ago
    To be fair, grandfathering doesn't mean putting off a price raise for a limited amount of time, it means not changing the terms/policies/pricing for the duration of the account because they signed up with those and should keep them. You're simply giving them 90 days notice.
brockf 15y ago
<plug> Run your own Spreedly and stop adding service fees to your payment processing fees! http://www.opengateway.net/ http://www.opengateway.net/ </plug>
bcx 15y ago
I know the Spreedly guys personally (and have been using them for years). Honestly, they underpriced their services and need to make more money if they are going to add features and build a better product. Doubling their prices certainly seems like a reasonable idea, I wonder what other models they looked at.

53 points by happyfeet 15y ago

I'm very surprised they haven't chosen to "grandfather" existing customers, so that they can remain on the previous pricing model.

happyfeet 15y ago
True. They have proposed to "grandfather" the current plans only upto 90 days so customers to migrate elsewhere, if they opt to.
- eps 15y ago
  And this probably means that they did the numbers and whatever they are going to loose with those who leaves will be offset be increased fees paid by those who sticks around.

happyfeet 15y ago

It is surprising to see this coming from Spreedly, especially in the context of their previous discussion on the same topic in HN (when Chargify increased price). When you price a subscription product, one should factor in long term sustainability at that price, for a long time. Any price increase due to additional features / facilities you provide - say 24*7 on-call support, must not be burdened on your existing users. Provide a way for existing users to "opt" for those at a higher price, but leave them at the current price as they stand.

bigiain 15y ago
"It is surprising to see this coming from Spreedly" Really? A relative newcomer to e online payments space, undercutting the status quo pricing of the incumbents, suddenly finding they've underestimated the costs of running their service? Doesn't surprise me at all... If I were building a new business based on any of the new online payment services, especially if they're significantly less expensive than traditional merchant accounts or PayPal, I'd be treating it as a short term windfall until they discover the hidden costs they're not charging you for. If they're _very_ lucky, maybe they've got some brand new fraud prevention technology that means the genuinely have lower running costs than PayPal or Visa, but I wouldn't bet _my_ business on it.
- karamazov 15y ago
  This is a great point - their choice may very well have been between raising prices and shutting down.
- ntalbott 15y ago
  This makes me chuckle - the funny thing is that we were actually the first "small business" subscription service - Chargify, Recurly, etc., all launched well after us. That said, it also meant we didn't have any point of reference when we initially set pricing. I think we actually did surprisingly well four (4!) years ago, given the lack of information we were working with.

veyron 15y ago

If it is so sticky, why don't people sign up for multiyear contracts for recurring billing services with some sort of price guarantee?

MicahWedemeyer 15y ago
AFAIK, none of the providers offer such a thing. A nice, idea, though.
ntalbott 15y ago
Think businesses would bite? Month-to-month, no minimum, cancel any time is so much in vogue, it's hard to imagine there would be much traction around a multi-year contract, but maybe I'm wrong.
- veyron 15y ago
  I would sign up, if that's any consolation :) More generally, it's one of those things that you don't want to change if it works well. Maybe the best model is an short term contract (e.g. 3 or 6 months) which can roll into a multiyear contract.

patio11 15y ago

My monthly Spreedly bill went up by approximately the amount I spent on AdWords between 9 AM and 3 PM on Friday. I know pricing discussions generate a lot of heat, but honestly, $30 is not a lot of money. Nor does it magically become a lot of money after you have 500 customers, at which point you have very high-class problems. Here, let me extend that graph with one extra line: http://images1.bingocardcreator.com/blog-images/hn/spreedly-price-change.png http://images1.bingocardcreator.com/blog-images/hn/spreedly-... This subject seems tailor-made to solicit opinions from pathological customers who are not likely to be either good customers for Spreedly or successful at selling many accounts, totally regardless of whether Spreedly costs $5, $50, or $500 a month.

mark_l_watson 15y ago
Yes, what you just said. I don't use Spreedly, but it is a similar case with the AppEngine pricing: I want providers to charge a fair price and keep providing services. Also, same as AWS: I have customers who grumble some on their monthly bills, but providers need to charge a fair market price.
happyfeet 15y ago
You are right. This is true for businesses with substantial number of customers. It is a significant difference for those starting up with small customer base (10 or 20) to pay from $23 earlier to $53.
- mikeryan 15y ago
  I realize that there's many HN Members who may be trying to start a company in 3rd world countries where $30 is a significant chunk of change, and this may sound harsh. But if your business, at any point, can't absorb a $30 a month increase in fees for something as important as your subscription billing system then something is wrong.
  - ohashi 15y ago
    I am not really sure it's the price change that is most offensive. It's the fact they were willing to do it without regard for their current customers. I don't want to deal with a company that is happy to change their price whenever they feel like it and I get the short end of the stick.

MichaelApproved 15y ago

Sure, users can export and migrate, but that costs time and money to do. Code must be updated to work with the new provider and other projects would be put on hold.

patio11 15y ago
Exactly. If your engineering costs swamp $30 -- and they do -- this announcement is a total non-event for you.
- MichaelApproved 15y ago
  Sure $30 may not be a big deal but what's going to happen next time? And the time after that? What a terrible situation to be in. I sign up for a product, in part based on their pricing, and they bump up the cost knowing it'll be too expensive for me to move. If this happened to me, it might be too expensive for me to move an existing product away from them but it'll definitely keep me from putting another project on the platform. For the record, I'm using Recurly, so I'm talking directly from the point of view of an existing and paying customer.

Silhouette 15y ago

I think those suggesting that this is an insignificant rise are missing the point. These subscription billing services have close to the most powerful lock-in imaginable on your business. When you commit to one, you are trusting them with a vital part of your operations. At best, switching later is going to be disruptive to your business and potentially damaging to your customer relations. This is the third of the most well-known recurring billing services to sharply increase prices in the not-so-distant past, after Recurly and then Chargify. In each case, that suggests they have either screwed up their projections so much that they had to grab extra money or deliberately screwed their customers over by dramatically increasing costs when they have an all-but-captive audience. Either way, that is a serious black mark against an organisation that's asking you to trust them with something as important as your payment processing, particularly when those organisations are already relatively tiny compared to most payment-related services and therefore inherently risky to build on anyway. BTW, blog posts from these services about how they are just trying to find a sustainable business model and hope their customers will understand aren't exactly reassuring. If they could get things so badly wrong before, why should we trust that they are doing any better now and won't see another rise next year? This isn't newsworthy because of the amounts involved. It's newsworthy because it reflects on the competence of these payment services and illustrates a dangerous trend.

olefoo 15y ago
Or it could be that all three of these subscription billing companies got shafted by their correspondent banks...
- lclarkmichalek 15y ago
  Not likely for spreedly, as you have to provide your own payment gateway i.e. paypal.
- timharding 15y ago
  None of these guys pay the banks. Their customers are already paying a for payment gateway for that service, they sit on top providing recurring billing and subscription management.

timharding 15y ago

It's not so much the rise in monthly fixed costs that's the problem. It's the doubling of per transaction pricing (that will just sting month after month) and the lack of features compared to now cheaper competition. Recurly at 10c vs. Spreedly at 40c.

primigenus 15y ago

Last year here on HN, Nathaniel said this: "The ridiculously huge mistake I think Chargify made here was something I thought was just a given these days: they should've unilaterally grandfathered all of their existing clients, and quietly given the grandfathered plan to anyone who was already integrating but not yet launched as well." (http://news.ycombinator.com/item?id=1781104 http://news.ycombinator.com/item?id=1781104) It's one thing to trash your competitor publically. It's another to then do the exact same thing you were complaining about one year later. This isn't about the numbers - $30 is jack squat. This is about principles. With this decision, Spreedly shows that they can say one thing and then do the exact opposite. And that's troubling.

ntalbott 15y ago
One learns a lot in a year. I said some things then that I wish I'd had more experience to back up; if I had, I probably would have tempered them more. That said, I also said this: "Even if you absolutely have to raise prices across the board, I think three months of warning is the absolute minimum amount of time to give a customer base before you hit them with the increase." We're doing that, with a unilateral offer to grandfather customers for 90 days. In general, I still think grandfathering is best when possible, but when you realize your business isn't growable (and barely sustainable) at current prices then something's gotta give. We've put this price raise off too long, hoping to soften it with new features, etc., but it's a chicken and egg problem. We can't do what needs to be done without the resources to do it. So prices have gone up, and it's the next day and we're in a better spot to help all our (remaining) customers rock.
- ohashi 15y ago
  To be fair, grandfathering doesn't mean putting off a price raise for a limited amount of time, it means not changing the terms/policies/pricing for the duration of the account because they signed up with those and should keep them. You're simply giving them 90 days notice.

brockf 15y ago

<plug> Run your own Spreedly and stop adding service fees to your payment processing fees! http://www.opengateway.net/ http://www.opengateway.net/ </plug>

bcx 15y ago

I know the Spreedly guys personally (and have been using them for years). Honestly, they underpriced their services and need to make more money if they are going to add features and build a better product. Doubling their prices certainly seems like a reasonable idea, I wonder what other models they looked at.