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Having run a small (100K users) SaaS company and seen some of this first hand, this is interesting. We never automated any of this, rather just communicating wi

Having run a small (100K users) SaaS company and seen some of this first hand, this is interesting. We never automated any of this, rather just communicating with customers asking them to try another card, or in extreme cases getting them to send a bare PayPal transfer then manually provisioning the payment against their account. I also worked for a startup in the 2000's that had the exact same conceptual idea, but applied to a somewhat different specific use-case. However, that's not what really makes me curious about this, which is: how do you make this a business? If someone explained this idea to me cold I'd immediately say "that's not a business, it's a feature of Stripe/PayPal et al". From a technical perspective the integration with the customer's (customer of FlyCode) systems seems challenging.

justchad 2y ago
Profitwell does a version of this and they charge a percentage of the recovered funds.
- JakeVacovec 2y ago
  We offer both -- those with seasonality like % vs. our largest like a flat SaaS fee so it's a clear line item in the budget.
- artur_makly 2y ago
  We use them for this and it pays for itself.
TZubiri 2y ago
It can start out as a business and then get acquired by a bigger business like Stripe, paypel, business, mercury. Either by purchasing the company whole, or by contracting to implement the feature on their systems.
- freedomben 2y ago
  I agree, that seems like the most reasonable exit strategy. From what we know of the model, it's something that could reasonably get built by Stripe into Stripe. I wouldn't be surprised if they're already working on something like that.
- deleted 2y ago
  [deleted]
- DowagerDave 2y ago
  I worked in Ecommerce with a company that built sophisticated subscription solutions well before Shopify had a real offering. We took significant VC money, then watched Shopify build out their own solution to service the now proven market. I'd expect them or Stripe to do the same thing here; it's way more common than buying the first mover or hiring them to build it, plus YC has no interest in this sort of business model.
JakeVacovec 2y ago
We make the integration process nearly effortless for our customers -- we've built apps for Stripe and Shopify and have plans to build out more. Pricing is a flat SaaS fee based on recovered revenue. If we help businesses recover 20%+ more on average the business model is a simple ROI equation. There's many opportunities to expand our value throughout a payments journey. Merchants rely heavily on rule based business logic for payments and continue to add more rules over time. The expansion opportunity we see is to provide dynamic logic/decision day 1 without all the internal development/iteration.
npollock 2y ago
doesn't Stripe have an interest in maximizing this revenue recovery? they earn a percentage of successful charges
- JakeVacovec 2y ago
  It's a diminishing returns problem... If they charge 2.9% + $.30 as their standard pricing, they are only keeping a small % of that as the issuer (Chase) gets the largest piece of the pie and the network (Visa) takes their cut too. If each declined authorization costs Stripe $.25, each attempt chips away at their margin.
  - deleted 2y ago
    [deleted]

justchad 2y ago

Profitwell does a version of this and they charge a percentage of the recovered funds.

JakeVacovec 2y ago
We offer both -- those with seasonality like % vs. our largest like a flat SaaS fee so it's a clear line item in the budget.
artur_makly 2y ago
We use them for this and it pays for itself.

TZubiri 2y ago

It can start out as a business and then get acquired by a bigger business like Stripe, paypel, business, mercury. Either by purchasing the company whole, or by contracting to implement the feature on their systems.

freedomben 2y ago
I agree, that seems like the most reasonable exit strategy. From what we know of the model, it's something that could reasonably get built by Stripe into Stripe. I wouldn't be surprised if they're already working on something like that.
deleted 2y ago
[deleted]
DowagerDave 2y ago
I worked in Ecommerce with a company that built sophisticated subscription solutions well before Shopify had a real offering. We took significant VC money, then watched Shopify build out their own solution to service the now proven market. I'd expect them or Stripe to do the same thing here; it's way more common than buying the first mover or hiring them to build it, plus YC has no interest in this sort of business model.

JakeVacovec 2y ago

We make the integration process nearly effortless for our customers -- we've built apps for Stripe and Shopify and have plans to build out more. Pricing is a flat SaaS fee based on recovered revenue. If we help businesses recover 20%+ more on average the business model is a simple ROI equation. There's many opportunities to expand our value throughout a payments journey. Merchants rely heavily on rule based business logic for payments and continue to add more rules over time. The expansion opportunity we see is to provide dynamic logic/decision day 1 without all the internal development/iteration.

npollock 2y ago

doesn't Stripe have an interest in maximizing this revenue recovery? they earn a percentage of successful charges

JakeVacovec 2y ago
It's a diminishing returns problem... If they charge 2.9% + $.30 as their standard pricing, they are only keeping a small % of that as the issuer (Chase) gets the largest piece of the pie and the network (Visa) takes their cut too. If each declined authorization costs Stripe $.25, each attempt chips away at their margin.
- deleted 2y ago
  [deleted]