
Honest opinions, am I chasing a lost cause?  - mrkmcknz
I'm working on a project in which the sign up goes live in one week and I'm starting to get a lot of negative feedback and have sunk around $35,000 into the process. (Not my money at that!)<p>To be honest I thought the world was my oyster and I'm now in a constant state of anxiety.<p>Basically I've built a social payments service in which you can make a payment to someone and have it appear in their bank account direct in 3hours. At a cost of 5%; So $100 would cost you $5.<p>The social aspect is kind of cool and I can't wait to ShowHN.<p>Is this as worthless as people are suggesting?
======
toddmorey
There's not really enough information here to tell. Are you getting negative
feedback from people who have actually used / tested the product or is it just
people opining on the idea itself? Now that I no longer carry cash, it is
actually really hard to pay a friend. I ran into this problem yesterday and I
still owe a friend $15 for lunch. There's not a good way that I've found to
solve that problem (especially in 3 hours) from my cell phone. In short: I'd
be pretty interested if this was well executed.

~~~
untog
If you're in the US, try Venmo.

~~~
toddmorey
That's great and free for payments between friends. Love it. Thanks for
pointing it out.

------
rglover
People will always try to convince you that your idea is "worthless." It's
your job to convince them otherwise. Seriously, think about why you started
this project in the first place, what made you say "yeah, I'm going to work on
that?" In the event that it doesn't work, you'll always be able to say "I
tried it." Wait until its launched and let your customers validate it, not
spectators.

~~~
watmough
Yep, who would have wanted a keyboard less net book that doesn't even run pc
software?

What an incredibly stupid and niche product idea!

The spectators were terribly, terribly wrong.

------
dwynings
You're a week away from an actual answer. Launch and let the market decide
whether it's a lost cause.

FWIW, Seth Godin calls what you're going through quieting the Lizard Brain,
and it's something every creative has to go through – the fear of failure and
being judged.

[http://sethgodin.typepad.com/seths_blog/2010/01/quieting-
the...](http://sethgodin.typepad.com/seths_blog/2010/01/quieting-the-lizard-
brain.html)

------
md1515
Well it isn't worthless and if you are $35K in the hole, you should just try
to release some MVP and see what feedback you get. You do not want to waste
too much time if it will not work, but be sure before closing shop. Most
startups do not die. They commit suicide.

------
lukifer
I'm guessing that one of the complaints you're getting has to do with the
amount you're charging. Even on a small transaction, 5% feels like enough to
be real money, creating a psychological barrier. Assuming you're in a position
to change it, I would ratchet it down to 1-3%.

That said, if you manage to succeed, I guarantee that you'll experience a
worse crisis (real and/or emotional) than what you're experiencing now. This
is the roller coster that everyone warned you about (or if they didn't they
should have).

If I were you, I'd stay with it at least through launch; if it's going to
fail, it's going to fail. Either way, you'll be a better person for the
experience. When it's resolved one way or the other, you'll be in a better
spot to assess whether this is the life for you.

------
InclinedPlane
It's not at all worthless, but you are operating in very treacherous waters.
Firstly, regulation and legal entanglements are going to be a huge issue once
anyone starts paying attention to you. That alone could quite easily sink you
if you're not prepared. Secondly, fraud and illegal transactions will be a big
problem that you will have to deal with, which could prove costly, again, if
you aren't prepared. What do you do when, not if, the Russian mafia et al
starts using your service for money laundering? Thirdly, you are going up
against some serious competition which is capable of operating at lower
margins.

For something like this you should know enough about your market to know
whether or not it has a chance, at least far better than the public at large.

------
charlesju
I would very cautious moving forward. What you have invested is a sunk cost.
You should only analyze how to allocate future resources (namely money and
your time). If a lot of people are giving you negative feedback, I would
change your idea. There are only two reasons for treading against negative
feedback (1) you truly believe in your product or (2) you have a good track
record that shows that you know better than the average consumer. It doesn't
sound like you are a seasoned entrepreneur and, I'm sorry to say this, your
product does not seem like a passion play.

I would pivot.

*<http://en.wikipedia.org/wiki/Sunk_costs>

------
watmough
Sounds like a fantastic idea. If you present it right, 5% is not that big a
deal. Banks charge sometime $25 just to do a wire transfer, and for your 5%,
you would still be winning at anything up to $500. $5 per $100 would be ok by
me if it solved an immediate problem. Quicker and cheaper than FedEx.

My main concern for you would be, doesn't it cost thousands to register as a
bank? Which surely you will be?

~~~
SoftwareMaven
PayPal wasn't a bank (I think they might be now). If you are just shuttling
money, you don't have to become a bank. However, there are rules (like no
holding onto people's money).

------
adaml_623
If you can transfer amounts as low as $10 then I think the 5% fee might seem
reasonable. Personally 5% of £100 feels too high.

~~~
Natsu
As a counter-point, I would mention that Western Union fees seem to be about
10% of whatever you transfer.

------
mansr
I presume this service is only targeting the USA. Here in Europe, any bank
will do immediate domestic transfers for free.

~~~
ionrock
Do they provide a simple app that you can use easily with a phone? I'd say the
"social" aspects are where the benefit is. Being able to let one person pay
the bill and everyone else just send their part seems handy.

~~~
deadcyclo
At least here in Norway, most banks provide multiple ways of easily
transferring with a phone: SMS, Android and/or iPhone apps and mobile web
pages. My bank has all of these options. All four options in addition offer
transferring between ones own account, retrieving balance, etc. The Android
and iPhone apps and the mobile web pages offer more advanced stuff like paying
bills, etc. as well. They even offer purchasing stocks and maintaining ones
stock portfolio.

------
steve8918
Be mindful of criticism, but also don't let it mess with your head. Any time
you release something to the public, there will always be people who love it
and those that hate it. If all you listen to are the haters, then you'll never
succeed at anything.

The bottom line is whether or not people are willing to pay for your service.
So I would go over the negative feedback and take a cold hard look at whether
or not they have a point, and if so, then make a change.

But don't stop your release, you should definitely go live at this point.
Don't let your ego get in the way, someone has invested $35,000 with you, so
you owe it to them to at least release and then figure out if what you have is
going to work, and if not, then change it.

------
mbyrne
Criticism about price from people who aren't actually customers is worthless,
particularly because you don't even know who your customer is. You'll find out
when you launch something.

Price is also a way to pick your customers. You want to deal with people who
have money and value your product, or critical, complaining cheapskates and
ingrates? Pushing yourself to lower your price pushes you to commodify your
product and strip out what might be creating all the value.

You can also A/B test your pricing on your landing pages to graph out a demand
curve for your service that will let you optimize your pricing to maximize
yield, but I think pricing based on value creation and cost of substitutes is
a better way to go.

------
veyron
Have you seen venmo? They do social payments with overnight transactions for
free (instant payment to your venom account and overnight payment to your
bank)

In their case, they took vc money and it looks like they are eating the bank
fees ...

------
petervandijck
Only way to tell is to launch.

~~~
jamesbritt
Exactly.

My question then is what would the downside be to just launching and finding
out?

------
mrkmcknz
The 5% fee does seem to be the main point of criticism. My argument is how
else in the US can you make a payment of say $30 at a cost of $1.50?

It looks like it will all boil down to the execution.

With it getting so close to launch I'm just ridiculously nervous. It's all I
can think about, I just want one night where it's not on my mind. The fear of
failing that is and letting people down.

I mean the other option would have been to enter YC in which case I'd be
months away from release and probably still waiting on PG to tell me to pivot.

~~~
SoftwareMaven
I wouldn't worry about the cost just yet. If you can really deliver three hour
turn-around, you will find a class of customer who needs to get money
somewhere quickly. Those will be the customers you want to cultivate.

The only caveat might be in larger transfers: if I need to get my late
mortgage payment to my bank, 5% can be in the hundreds. At that point, FedEx
is cheaper (but still slower). Make that balance work, and you can be
successful.

------
devs1010
Well, I would dig deeper as to why the feedback is negative. I personally hate
existing internet pay services like PayPal due to their red tape, etc but then
there are a lot of legal issues with transferring funds online and the
government can cause a lot of problems with anyone in this business, so if the
negative feedback is related to this then you may want to listen and see how
to address any legal concerns

~~~
mrkmcknz
The legal regulation is what built up the bulk of the cost.

It basically comes from people suggesting they can't see why anyone would use
the service, or enough to make it worthwhile.

------
kurt_
I suggest you to read this book: The Lean Startup. It explain how to drive
your startup using tests and how to validate your strategy or change it. They
are many examples of successful business who has changed their strategy many
times before getting successful.

<http://theleanstartup.com/>

------
sskates
My first instinct is you're worrying about nothing.

However, if you really want to know, who is the negative feedback from and
what is it about? You have to be more specific here, otherwise we can't really
say.

------
inuhj
Can you put an email address in your profile?

~~~
mrkmcknz
Done.

