
The Next 1,000 Start-Ups - daniel_levine
https://www.braintreepayments.com/blog/next_thousand_startups
======
callmeed
Good move by BrainTree.

As much as I love Stripe and their innovative moves, the bulk of my business's
transactions have been handled by BrainTree over the last 4 years. That
includes both SaaS subscription billing and third-party payment aggregation
(we do niche ecommerce, take a transaction fee, and ACH to customers). Our
transaction fee is below the (now seemingly) standard 2.9% which adds up when
you get to hundreds of thousands of dollars or more in processing. BrainTree's
support is great ... I'm talking Rackspace-level great.

Some of you talk like BrainTree is an old-school behemoth which is being
disrupted by Stripe, which is silly. News flash: BrainTree is not PayPal.
Obviously they are all competitors, but I see nothing to indicate that
BrainTree can't keep pace with Stripe moving forward.

I do use Stripe for things–and I do love it. But we wouldn't be where we are
today w/o BrainTree.

~~~
polyfractal
Agreeing with everything here, and adding the fact that Braintree has
incredible support. There have been several occasions where I couldn't figure
out a bug on my side, or there was a gap in our database records while testing
a new feature, and I was able to get on the phone with a customer service rep
and get it sorted out in minutes.

I've never had such a pleasant customer service experience before, doubly
surprising because it was with a financial service.

Braintree is pretty awesome.

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kami8845
A cute marketing trick. No you're not doing this just because you want to
"help new startups". That's a nice way of rationalizing it, but really

1) Braintree is suffering from the competition, especially on HN, Stripe is
loved like no other

2) They're not giving away 2 million dollars. With so many startups failing to
ever generate significant revenue, I wouldn't be suprised if less than 10% of
companies that are the first 1000 to register actually wind up generating $50k
in revenue through their service. I'm sure Braintree have their own internal
calculations about how much this will cost them and that number is certainly
no where near 2 million dollars.

3) The primary purpose of this is to bind new businesses to Braintree. The
scenario of "getting their free processing here and then going somewhere else
before they pay us a nickel." is cute, but misleading. At that point in the
company's development switching the entire payments system is much more
expensive and would not make any economic sense.

Props to Braintree for coming up with this, I think in the end it's beneficial
to the startup community, though I dislike the "second coming of jesus
christ"-vibe of the announcement. They're doing this for business reasons, not
because they woke up yesterday and felt a little charitable.

~~~
djb_hackernews
I think you are getting downvoted because your comment embodies the easy snark
that is REALLY hurting this community. IMHO, seeing that your comment is
currently at the top tells me we still have room for improvement.

I don't think anyone is deluded into thinking this is a charitable gesture,
certainly not on hackernews, so I am confused why you spent so much time to
(in an agitated way) make it seem like Braintree is pulling one over us.

~~~
minhajuddin
I don't understand why people get offended when someone tries to find a motive
behind something

    
    
      “So, what’s the catch - is this just a marketing promotion.” There’s no catch, no strings attached, no BS -- we just want to do our part to give back to the community that made us successful and this is our way of paying it forward.
    

Clearly Braintree wants us to think they are doing it to do 'their part'.
Pointing out that this might not be true shouldn't offend you. The parent is
not challenging your intellect. He is just making an observation. I got a few
negative comments on something similar I wrote about github
[http://minhajuddin.com/2012/09/29/github-is-not-really-
free-...](http://minhajuddin.com/2012/09/29/github-is-not-really-free-for-
your-public-open-source-projects) .

Am I missing something here?

~~~
olalonde
> Pointing out that this might not be true shouldn't offend you.

Speaking for myself, I'm offended by such comments not because they aren't
true but because yes, they do offend my intellect and waste my time. We all
know that Braintree and Github are not charities, let's talk about something
interesting instead.

------
rkalla
There are multiple aspects to payment processing with basic payment processing
and integration being the minimum -- Stripe currently has the most beautiful
story here.

Things get more complex on the back end of the payment being processed at
scale, namely fraud detection and risk mitigation. This is where some of those
behemoths in the industry actually shine more.

Stripe passes the risk directly through, you are on your own.

For a lot of folks here working on startups with their first few-hundred
customers, that isn't the problem -- the problem is accepting payments and
getting back to work. I don't see anyone beating Stripe in that game.

For the folks that have huge customer bases, mitigating risk and dealing with
fraud is a much more frequent/costly problem and having a processor help out
there is why companies like PayPal (and BrainTree?) are still in people's
vocabulary even though a good majority of their experience on the front-end
suck.

This is one of those problems that doesn't matter to you at all, until it
does... then it is a huge nightmare and you scramble around looking for a
solution and suddenly realize why "everyone doesn't just use Stripe" -- or
some equally hot new processing startup.

~~~
callmeed
I'm not sure I agree with you. I've had to deal with plenty of fraud issues.

How is Stripe passing the risk on any more than other processors? [1] The end-
result of fraud (at least, the kind I'm familiar with) are chargebacks. Those
are going to fall back to you regardless of who your payment processor is.

We've had major fraud issues on our system which is powered by BrainTree. When
you hit a certain chargeback rate, you basically get a call from the
underwriting processor/merchant who says "Get your crap together or get lost".

PayPal is a slightly different animal IMO.

<https://stripe.com/help/disputes>

~~~
LukeHoersten
My guess is that it depends on your business model.

(1) The risk to a TPPA model would be a fraudulent payment merchant signing up
with your service buying from themselves with stolen cards. Charge-backs would
occur here once the card owner discovered the card was stolen.

(2) The direct sale model risk would be selling and delivering a good or
service and then the card holder (stolen or otherwise) charges-back to get the
good/service for free.

In case (1) fraud detection would help detect the stolen card and mitigate the
risk. In case (2), legitimate charge-backs from non-stolen cards are probably
sometimes the bigger risk. I most likely didn't hit all the cases here but it
certainly seems to be the case that PayPal or the like would not always help
your business model with fraud prevention, supporting what callmeed said here.

------
jbevain
Interesting move. Too bad it's US only for now.

We're currently using FastSpring but both the recent opening of Braintree
towards Europe and the price getting a clear 2.9% + $0.3 are making it pretty
interesting.

Make a similar promotion for Europe and I'll probably switch.

~~~
klynch
We would love to do this for startups around the world. It's tricky to do with
international banking relationships, but we'll continue to work with them to
bring more opportunities like this outside of the US.

------
siculars
This is classic competition at work. Along comes Stripe that forces companies
that are not asleep, like Braintree, to compete on price or innovation or some
other axes.

~~~
fratis
When I was doing research on this for my startup a few months ago, we found
that Braintree easily beat Stripe on price. This is just icing on the cake.

Braintree's not as glamorous (I think), but if you're doing a large number of
transactions, Stripe's 2.9% + 30¢/transaction is quite high.

~~~
jusben1369
Your analysis is true although now Braintree's pricing is that of Stripe's -
at least for startups who can't or don't want to spend cycles getting a stand
alone merchant account. So it's good to make that distinction. I suspect the
value with BT is that once you get real traction you can opt out of the more
expensive rate into something more competitive - probably as soon as when
you're doing a few thousand dollars per month.

------
sbashyal
To provide some perspective, I did a calculation using their pricing
information and assuming the average transaction size of $10 - the waived fee
amounts to $2950.

edit - changed language to make it more meaningful

------
Murkin
Please fix headline to:

"Braintree Waives All Fees On First $50k in Transactions For Next 1,000 _US-
Based_ Startups"

Might be a good idea to do this always, just a little thing to acknowledge the
other 95% of the world..

~~~
jusben1369
Agree. It should be at the top not at the bottom of the post. Cruel tease to
many who'll see this.

~~~
myelin
Boo -- someone changed it to the much less informative "The Next 1,000 Start-
Ups" :(

Mods, please prioritize informative versions of titles!

~~~
_delirium
Yeah, I clicked on this expecting a piece about the medium-term future of
startups (the next 1,000 startups, say). A title indicating it was a promotion
targeted _at_ startups would've been more informative...

------
mcrittenden
I wonder if Braintree has been suffering since Stripe launched and this is an
effort to get things moving again.

~~~
levifig
Was thinking the exact same thing. Another evidence of how (quality)
competition benefits the customers… :)

------
juddlyon
Amidst all the weird negativity and to-and-fro, just wanted to say "DEATH TO
PAYPAL API INTEGRATIONS!"

Go Braintree. Go Stripe. Go Recurly. Go CheddarGettar. Go Spreedly. Go
whomever has the guts to tackle this beast!

Apologies to my friends at PayPal in case they read this....

~~~
bravoyankee
This needs to be voted up to the top :)

------
littlegiantcap
Awesome! Payment processing is probably one of our biggest headaches, and this
just gave us enough of a reason to try you guys out. Excited to try it out.

------
davidedicillo
What about those startups that already have an account but not generating
revenues since they just launched a week ago?

~~~
sethbannon
As with most promotions aimed at user acquisition, you're unfortunately out of
luck.

~~~
klynch
@sethbannon- This is not most promotions. Our goal is to help startups get off
the ground.

@davidedicillo- We're happy to help recent signups who qualify, shoot an
e-mail over to support@braintreepayments.com and we'll set things right.

-Kristi from Braintree

------
thehodge
yes yes yes!

"Note: we’re only able to offer this to start-ups with a presence in the US
today. We recently launched in Europe and Canada and hope to be able to do
something similar for international start-ups soon."

Oh... maybe later

------
TomGullen
Excitedly rushed to sign up as we're interested in offering alternative
payment solutions - disappointed as we're in the UK we can't and this wasn't
immediately obvious!

Either way looks like a very cool offer!

~~~
justincormack
any company naming themselves after a town in the UK ought to be available
here...

~~~
mvboeke
Braintree's service is available in the UK, we just can't make the free
processing offer outside of the US. Check out
<https://www.braintreepayments.com/tour/international> for more info.

Also, our company name comes from the town of Braintree, Massachusetts, which
is the home of the American revolutionary John Adams. I hope you won't hold
that against us.

~~~
justincormack
Ah I guess Braintree MA is named after the original!Will have a look, thanks.

------
jobu
The promotion is only available to "eligible merchants", but it is not clear
what qualifies one as eligible.

Anyone from Braintree willing to clarify?

~~~
mvboeke
Michael from Braintree, here.

The idea behind this offer is to help launch more startups. We aren't policing
this with specific limits, but we're asking that you only use this if you are
truly a pre-revenue start-up or just started to collect fees for your product.
If you’ve already got your start, then congratulations - we would love to work
with you and help you grow. And you'll probably find that our standard pricing
works well for you.

~~~
white_devil
I'm happy that you changed your pricing to 2.9% + 30¢ - it did actually feel
too expensive before. Thank you for supporting The Rest Of The World too! If I
needed a payment gateway right now, your service would be a total _no-
brainer_.

------
xoail
So 1000 startups, meaning 100 real new startups (I doubt startups that are
already into payments using other platforms would switch), of which 10 or less
startups could really do 50k in transactions, meaning 10x50000x0.027 = $13,500
(tops and not $1M) in loss for Braintree... But I am sure they are getting way
too much marketing out for this.

~~~
bpick
Not to mention you need an account with them in the first place and Braintree
is well known for having a ludicrously strict risk team.

So yes, this is just a marketing gimmick.

~~~
klynch
Kristi from Braintree here. Admittedly, our legacy bank relationships left us
as the middle man to their risk departments. This may be what you are
referring to when you mention the "ludicrously strict risk team." This is no
longer the case. Starting with the launch of our instant product, we brought
risk in house. We are able to use our years of experience working with
startups to develop risk processes that help us build relationships, not get
in your way.

------
corkill
Tell you the company that will get my business out of stripe, braintree and
the others. The one that works out how to let us open an account without an
SSN. Currently we are with SAASY for that reason, they charge 5.9%.

~~~
mvboeke
@corkill - I work on the signup and application process for Braintree, and I
would be curious to know why SSN is a deal-killer for you. Do you not have a
SSN, or is it just something you would rather not share? Feel free to email me
at mboeke@braintreepayments.com if you would like.

------
pdenya
Is this literally the next 1000 braintree signups or is that a marketing term?

~~~
caitlins
Hey, it's Caitlin from Braintree. Yes, this is literally the next 1,000
merchants who signup through this page:
<https://www.braintreepayments.com/next_thousand_startups>

~~~
emeltzer
The "instant signup" page says I have to wait one day for underwriters to
assess the app, is that normal?

~~~
klynch
Most applicants will be approved instantly. There are some circumstances, such
as the specifics of your business model, that may require a brief manual
review. At most this will take 1 business day, but many reviews will be much
quicker.

The good thing about doing this upfront is that you don't have to worry about
running into any issues (like unexpected shutdowns) as your processing ramps
up.

------
jcampbell1
I have 900 different startups all with a variation of the name
GiveMe50000FreeAmexPoints.com

I wonder if my startups are eligible. :)

------
wia
Looks good for starting out. Reminds me, has anyone heard back from
startuppack.org?

------
LukeHoersten
This promotion doesn't apply to third-party payment aggregation businesses.

------
twodayslate
It looks like they can't handle the traffic. Not a good sign for them.

~~~
klynch
Braintree here. Can you elaborate? We're not seeing anything slow down on our
end.

------
snambi
Couldn't agree more.

