
Bootstrapped, Profitable, & Proud: Braintree - benmills
http://37signals.com/svn/posts/2800-bootstrapped-profitable-proud-braintree
======
MicahWedemeyer
_He took a few days off work and flew out to Utah, where his old customers
resided. He asked them if they’d switch their processing to his new company,
Braintree._

Every company I've worked at has strictly forbidden this kind of thing via a
noncompete agreement. Essentially, it's in the name: "Noncompete Agreement"

Be careful what you sign, and be mindful of what you have signed in that past!

~~~
bryanjohnson
This is Bryan from Braintree. I was working for a different company at the
time I visited my former customers. I honored the one year non-compete I had
with my former employer.

~~~
MicahWedemeyer
Out of curiosity, did you catch any flak from former colleagues? I can imagine
many people would still be quite angry, even if you fulfilled your legal
obligation.

~~~
bryanjohnson
No, I didn't.

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thematt
For anyone who hasn't used them yet, it's the one-stop-shop and their API that
really sets them apart from the competition. You submit one set of paperwork
and they take care of all the accounts: merchant, gateway and api. No need to
chase down different accounts and get them all working together.

The fantastic API literally saved hundreds of hours of integration and build
time, as the recurring billing, discounts and everything is completely
programmatic and just works.

I just signed up within the last few weeks and throughout the whole process I
could tell they built it up with developers in mind, not as an afterthought.

~~~
haploid
Well, the convenience sure does sound nice, but the rates are staggeringly
high:

V/MC Non-Qualified: 2.89% + $.30

Cybersource+WFB clocks in at roughly half that for V/MC( although Amex rates
are around that level ), with per-transaction at 10 cents or less.

~~~
bryanjohnson
If that’s the case, they’re losing money on your account because that pricing
is below the wholesale bank costs (which is the same for everyone). You
probably want to check the fine print or your monthly statement.

Our (Braintree) pricing is actually very competitive. It may look higher
because we disclose all our fees. Nearly every provider we know obscures fees
both during the sales process and in the monthly reporting statements so
merchants never really understand what they're paying. Here's an example of
pricing trickery [http://www.braintreepaymentsolutions.com/blog/Costco-your-
ma...](http://www.braintreepaymentsolutions.com/blog/Costco-your-marketing-
department-has-gone-rogue)

------
stevenbrianhall
"Who are the customers Braintree decided to write off? “It was a fool’s errand
to try selling medicine to those who hadn’t yet experienced pain. Payment
processing is complex. It’s difficult for inexperienced merchants to recognize
value. We’d spend countless hours trying to explain ‘pain’ and our cure but
some just didn’t care because they hadn’t felt it yet...'"

That's money right there. And noted for the future of my business. People will
pay for you to take away the pain of their bad experiences with an inferior
service/product.

~~~
LiveTheDream
Perverse idea/thought experiment: what about creating two versions of some
service X which are ostensibly competitors; one is a free/cheap version A with
no support and one is a much higher-priced, supported and professional version
B. The answer to support requests on A would mostly be "no", with the
occasional "if you want that, use service B". Sort of an extreme take on
freemium/market segmentation. A acts simultaneously as the top of a funnel for
B (users who actually need the service and have experienced the pain of a bad
offering) and as a screen for bad customers (the ones you'd "fire" for
consuming more than their fair share of your resources).

~~~
nantes
I vaguely remember that in my previous career in grocery management that
diaper companies did something similar. I don't remember the brands/companies,
but one brand would be positioned at the high end while another was at the low
end. The high end had all the 'features' - moisture sensors, velco tabs, etc.
This allowed the one company to garner more shelf space, and thus eyeballs,
which brought higher market share.

~~~
jacques_chester
Market segmentation is a common tactic. Different consumers want different
things and are prepared to pay different prices. They will however lump
together anything under the same name.

So, for example, Cheap'n'Nasty Nappies Co may have done very well in the
bottom market segment. It will now struggle in the higher segment unless it
invents a new brand, say Bling Slings Nappies, with some ostensible
differences ("6 layers of plastic!") and a much higher price.

You will see this practice in every industry with large firms. They will own
multiple brands in multiple market segments.

------
tylerrooney
Oh how I wish Braintree was accessible in Canada. We've haven't been very
pleased with our payment processor as of late.

About a year ago I actually managed to get someone from Braintree talking with
someone from Chase Paymentech Canada (since Braintree supports Chase
Paymentech). Unfortunately, BT is integrated with CP Salem whereas CP Canada
only processes through CP Tampa.

If anyone has tried to do this in the last year and succeeded, please comment.

~~~
xal
We (Shopify) use braintree and are customers of Chase Paymentech. This is how
we collect all our fees.

~~~
tylerrooney
But I imagine you have a US domiciled merchant/bank account correct?

If you're doing that with a Canadian based merchant account, please send your
account rep's info at CP or BT.

~~~
tyrelb
beanstream in canada is actually quite good, easy to setup, low fees, and has
a good api (credit card data stored on their server). i looked at braintree,
but couldn't use them b/c of canadian merchant. beanstream also lets you do
funky things with canada/us currency (collect and settle in us funds, settle
in US banks, etc.)

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cookiecaper
I'm excited to give Braintree a go someday, but what I really wish is that
someone would come up with a system that was orthogonal to and independent of
the existing banking system.

The banks and the regulations make all real credit card processing a major
PITA, and while Braintree eases the process, they are not an exception as far
as I can tell. They still have to underwrite and they still have to vet
accounts for underwriting. If you have bad credit or anything else that would
prevent you from getting a loan, you're not going to be able to process cards
without PayPal, which means it's difficult to bootstrap yourself out of a bad
situation.

One of the main reasons I think Bitcoin is cool is because it's a great
experimental platform for this kind of stuff.

~~~
alexjawad
True, banking fees really do take up a significant post in the P/L, and the
smaller you are, the more you're paying, why it's not optimal for startups. A
startup bank would be a cool idea.

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avree
These guys are awesome—they power all our payments. The one thing I wish they
could somehow add support for is outgoing EFT/ACH transfers.

We do have one funny story about them from Getaround... one night, early in
the morning, we got a call directly from their CEO. Apparently we had written
some bad code that was just hammering their servers—basically, we were
accidentally DoSing Braintree.

Got it fixed up quickly, and have loved them and used them ever since!

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workhorse
Love me some Braintree!

Their API & API Documentation are fantastic.

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tomjen3
While this is valuable, it is really a company that shouldn't exist - banks
needs to be forced to use a standard API and be barred from abusing their
government monopoly.

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mcdowall
Am currently in the process of an application, so far their speed and quick
understanding in meeting the needs of my solution has been first class.

