Anyone else tired of how companies that started as startups are now completely out of touch with what bootstrapped startups face?
Things I have dealt with over the years:
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In LinkedIn, you cannot change company name without providing evidence that you have a company with the name you wish to change to - even though this was not needed originally.
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Asana: ~15 team members for free, but hit 16, and they charge you for 20 members. And change for all of them, not just the expansion. Oh, and as you grow larger, they actually charge more per members - all members - since "you've grown and can surely afford it."
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Intercom is always recommended by YCombinator. No one sees a problem with how YCombinator got in early in investing in Intercom. But the kicker is that while they'll give you a year at $49/month, look forward to their congratulatory email: You've graduated out of our Startup Plan! We anticipate your next monthly bill to be $2,264.
Oh, then "If you have any questions..." << which of course sends you off in a mad rush to attempt to replace them with something run by people who understand that it takes time to convert when you're freemium. Oh, and deeming everyone a contact that we should pay for just because we wrote them one (even if they did not act on the email) if crazy-exorbitant.
Yeah, I can relate, it's irritating. But I think people are like this in general, so it doesn't surprise me that companies (run by people) end up behaving this way too.
People naturally aspire for more, so we compare ourselves with those who are ahead of us or have more than us. And because we aim to one day get to their level, we behave how they behave, hoping that that's what'll get us there. Companies are the same; they aspire to grow and they look to their competitors to see how they can do better. They're not looking to bootstrappers, they're looking ahead. Because they're looking to where they want to go, not where they came from.
I think they're willing to accept losing a lot of customers to keep the ones that are willing to pay those large fees.
It's kinda like the old 80/20 principle. Focus on the 20% of customers that bring in 80% of the revenue.
It's also what most people recommend to freelancers trying to increase their revenue. It's a lot easier to charge more for the same work than it is to do the more work for the same price.
I understand your frustration and those price jumps and changes are super frustrating.
Although I don't think it's malicious on the part of the companies as they grow, I agree. If I put myself in Intercom's or LinkedIn's shoes, I'd get to the point where my target market has expanded to include people with higher willingness to pay.
Plus, as my platform develops, the value develops with it, which means higher prices.
That being said, I do think that companies which have startup plans for earlier-stage companies are better suited to grow (and monetize) a segment of the market that larger companies price themselves out of (at least in the case of competitive industries with lots of players - not so much in the realm of companies like LinkedIn)
Corporate complacency, it's the worse!
Thanks, and yes. But even worse, such as the Asana example, where they actually charge you more per team member as you increase number of team members, I would argue that it isn't complacency, it's a matter of what happens when a 20-something billionnaire, Dustin Moskovitz (now 37), makes something for startup founders. They lose their grasp on what many of us go through to get to cash-flow-positive.
I remember applying for a job with @courtlandallen, who was certain that I was there to recommend someone. Because with what I've done, and in my fifties, I couldn't possibly... Yeah, no, $500?week?! More than I've made in in quite a few years! I was there, ready with a contextualized presentation - because I wanted the job.
So yeah, with respect, I think when some have made it hugely, they lose their grasp of what it's like in a different country (I'm in Japan), and being aged out of nearly every opportunity.
https://en.wikipedia.org/wiki/Dustin_Moskovitz
Yeah that is a problem
This is something I think about for myself.
I never want to lose touch with my users.
Even if it means missing out on profit.
Any company that evolves into one where the business model is dependent on burning their customer base thinking "they'll get over it" is a dead man walking. As soon as a fair alternative of equal utility comes along the burner company hemorrhages customers.
Customer support is expensive. To keep costs down, most large companies simply do not provide sufficient support staff. Can you imagine how many staff would really be needed to support say 50 million customers if it were done properly?
I experienced this in 2000 with my domain name company where I created the under a tenner market but insisted we support all customers by phone. Within 6 months it went from just me to having 30 support staff! Luckily we introduced web hosting too (big fat margins), because the co.uk domains were a major loss leader.
Yes, the £26/month I pay Asana seems wildly expensive for little old me as a one-man founder in my latest startup. But frankly, the moment we all demand to have a customer support representative sat waiting to mop our brow and continually ask if we need any help, then that £26 should be more like £260 per month.
So what I am saying, is that the entire Saas pricing model is flawed and does not scale as well as we think. build once and sell many times for a tiny monthly fee isn’t the full picture. Add in support staff (and other big costs to manage a huge company) and the model falls apart.
People are great at pretending to care about their customers. Once money starts rolling in, it's no longer a concern.
This is also due to the fact that the company that you have mentioned are not "bootstrapped" companies. VC backed companies and bootstrapped startups are so different that it is not even fair to group them together
re: Intercom to talk with customers. My business is dev tools and my customers skew younger so I use Discord. It's what they know. I get to setup live-stream coding events and have 1:1 support sessions and maintain engagement. There are so many coding Discord communities out there that maintain professionalism through strict moderation. It really is a magic pill for engagement with younger devs.
I'm a bootstrapped founder and also a happy Intercom user. I don't want to play devil's advocate here but the value it provides is worth the cost imo.
And the cost is not as crazy as people make it out to be. Right now I pay $79/month for one seat (after the first year at $49/month). I've tried almost every alternative on the market (Tawk.to, Crisp, Kayako...). Nothing beats Intercom.
$79/month - so you have thousands of registrations? Ten thousand? See, because when you're freemium, and most of us not getting one sale for 100 that we need to write, with Intercom, you're fucked.
I don't believe it really matters how many users you have in total. The pricing is based on how many interact with you (and how many you interact with) in a given month. With my current plan, it's 1000 users.
But granted, it might not be the best tool if you have a ton of free users constantly asking things.
No what matters is how many you send a message to. Even once. You write them through Intercom, they count the person and they bill you based on those numbers., They don't understand Freemium, and how we need to write and write and write until we get someone to convert.
YC should know this, and shouldn't be pushing us to our doom.
Are you using Intercom for sales? It's really best as a support system (i.e., inbound queries from customers, not outbound sales/engagement messages). Otherwise yes, it does get pricey. For outbound, I would use email...
Personally, I love Intercom - we pay $149/mo and that gives us a "people reach" of 2000. We use a lot less than that, but even so, our support is something customers mention in reviews all the time, and it's a big reason they recommend others :)
We've moved to Crisp and get far more out of it. We're not throttled or charged for the volume of users we write, and they do a very cool thing: they keep adding features, and if you have their $99/month plan, you get everything they add.
With Intercom, every month or so you'll get an email that asks you to watch a 20-minute video without telling you - you, who may (as we were) be paying for all three of their products - **if the new bell or whistle is included with what you pay for. Oh, but of course it isn't; it's yet another upsell.
VC and public backed companies are forced to grow because shareholders. This means moving up market, hiring sales teams and making the founder spend time on hiring instead of building product.
Bootstrapped companies usually do the same unless the founder has a clear vision.
https://crisp.chat/en/ is currently a great example of saying loyal to initial customers.
Yes, but with respect, incubators like YC really should see the ethical problem with luring new founders into using something that they've invested in - when they know full well that the founder is then going to spend many hours learning all the chat-bots, automated responses, setting up their help pages (things Intercom offers) - only to find out how very fucked they are in 12 months.
YC backed companies have the money to use Intercom.
YC have also invested in open source intercom alternatives.
Not a chance; 550K investment, mostly contingent on getting real funding. They start you at 125K. Pay your staff and soon the difference between $49/month and over $2,000/month - just for your customer relations solution - is going to hurt.
Thanks for your thoughts, though.
Yes it is annoying, but it just means you can go after the users they're neglecting. For example I believe there are quite a few alternatives to Intercom that compete on price.
Yes, we switched to Crisp and love it
Freshdesk's chat product is pretty good on the free tier too :)
Sounds like a problem that needs to be solved.
I stopped using that platform because I don't like the spam and the website does not add value to my life.
Li has matured and now caters to a certain audience. I get it so I vote with my login!!!
Not sure what you mean about "Li," but as for the three companies I listed, LinkedIn, Asana, Intercom, well, I just turn off all notifications for LinkedIn (they're useless and a bit creepy), but the others I don't find spammy - just overpriced or, in Asana's case, nutso-priced (as you grow larger, instead of giving volume discounts, they go the other way: they actually charge more per member - all members - since "you've grown and can surely afford it."
Familiar with Fb though right? Great!
Maybe you like being redundant in spelling out long names everybody else abbreviates, idk.... but if you have to turn off your notifications what does that say?
Lastly, run on sentences are bad grammar. You put several ideas in one long sentence.
Have a nice day!
Ah right, gotcha. And yes, a hell of a sentence it was.
https://idn33gold.com/
Great to see so many people with strong opinions for/against my stance. I'm running a startup heads event tonight, starting 11 p.m. Pacific Time / 8 a.m. for central Europe. We'll go on as long as people are around, so come when you can. If the Stage Channel thing ends, just find me - Saul - in a VC channel and we'll talk anyway.
I am sincerely sorry about the crazy time; I live in Japan. Find the event with the Discord invite in Meetups (on the left side, in IH). I would do the IH Worldwide events - but invariably they are at around 3 a.m. for me ;-(
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Silly? I'd like to see more call-outs. They get big, and they fuck you.
Asana: did you even read what I wrote? They actually raise the price per user the more business you bring them. And "like everyone else" - founded by a guy who was a billionaire in his twenties: Dustin Moskovitz, early co-founder of Facebook.
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Sure, no harm done! I'm just sick of people lauding YC, %00 Startups, etc. like they are benevolent. They are about growing their money and throwing the invetive and innovative under the bus. We're flippables to them.
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I get your point, but I have to look at myself in the morning when I shave. I have a need to do right by people. I am not going to rope people into something that's about to fuck them with an elephant dick in a year. Yeah, no.
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Yes! RiteKit's in year eleven and we've always done the grandfather thing. Appreciate your early adopters.