
Thanks for the feedback. I've closed the service - nickl
http://discuss.joelonsoftware.com/default.asp?biz.5.829697.9
======
rubypay
Just saw this post about our startup, I'll clarify some things since some
people seem interested.

RubyPay was a points based payment system for digital content that anyone
could use. Points were bought for cash, and redeemable for cash. It was
released because we wanted to generate some feedback on the model.

RubyPay was closed so quickly because we realized some problems, and didn't
want any live transactions going through our system that we'd later have to
refund. Among some of the problems were:

1) allowing anyone to sell content without a screening process for them or the
content

2) allowing consumers to redeem the points for cash, which brought a whole new
set of laws into play

3) not anticipating all of the ways that fraud could propagate through the
system

We're currently working on the service to address these and other issues.
We've also discussed the business further with lawyers, became PCI-DSS
compliant, and are in the process of forming industry partnerships. As always
thanks for the feedback (there was another discussion thread on HN too), it
helped us quickly pivot and iterate on our model, and probably saved us tons
of time and headaches.

~~~
parallax7d
Well good luck to you. Don't worry about the haters that say you won't make it
because there is no trust built up like the trust users have for Paypal. Who
trusted Paypal when they first got started? And many people certainly don't
trust them now.

------
mtigas
Can you imagine how much worse this could have been if they’d never posted
this and simply plowed ahead?

 _Knowing when you’re in over your head_ is crucial and it looks like they
caught it early enough since they opened up the feedback thread. Hopefully
they’ll take this, regroup, and have a bit more ground to stand on in the next
phase or project.

~~~
JonM
Totally, a few days and a bit of embarrasment here is much better than
ploughing months of work in with no return.

~~~
moon_of_moon
Pretty sure a real entrepreneur will not view that as embarrassment. This is
the only way to start. Build something, put it out, review lessons learnt,
improve it, build the next thing...

Bill Gates' first idea for a company was one that made devices that were
supposed to be installed at traffic junctions, IIRC. (ref: business at the
speed of thought)

Way to go Vasudeva.

------
jhuckestein
Everybody here seems in agreement with the guy just shutting down the service.

My first reaction was WTF. In fact, I think the OPs last comment is a little
rude. None of the commenters were advising him to shut down the service. They
were trying to help improve the service ...

Altogether it's just weird.

~~~
kranner
As the first commenter on that thread, I can tell you I felt like shit when I
read the last comment. And all I told OP was to change the copy a little.

~~~
gabrielroth
We can't know what was in the guy's head, but it doesn't make sense to me that
you'd feel like shit. You suggested he change the copy a little. Someone else
asked if he'd consulted a lawyer. Someone else pointed him to the Wikipedia
page for Flooz.com, which includes the sentence, "In 2001, Flooz.com was
notified by the Federal Bureau of Investigation that a Russian organized crime
syndicate was using Flooz and stolen credit card numbers as part of a money-
laundering scheme, in which stolen credit cards were used to purchase currency
and then redeemed."

My guess is that it's the realization that he was in way over his head, rather
than your suggestion that he edit the copy on his site, that led him to change
course.

~~~
kranner
Thanks, I realize it wasn't my comment that made OP do it. It's just that I
found myself leading the lynch mob, without intending it.

~~~
stakent
No.

You, among others, saved him from lots of trouble.

~~~
kranner
Thanks, I should have seen it that way.

------
StavrosK
Has anyone used bitcoin? I'm not sure how scalable it is, but it's very handy
for online payments (peer to peer, no fees, etc etc)...

------
elbenshira
Can someone tell me what RubyPay was about? The (ex)founder took down
everything.

~~~
kranner
Micropayment wallet system, with a spread between buying and selling points.

------
jw84
As the great warrior-poet Jay-Z once said: "on to the next one, on to the
next."

~~~
sdrinf
Word of encouragement: "This too shall pass" :)

~~~
philwelch
"This too shall pass"--encouraging words when a startup doesn't work out, but
not the best toast at a wedding.

~~~
alex_c
Interesting distinction, since the relationship between co-founders is often
compared to marriage.

~~~
philwelch
Maybe, but you can have another startup. One particular startup failing
doesn't have to mean the end of the co-founder relationship. And it would be
equally a dick move to say "this too shall pass" at the _beginning_ of a
startup.

------
pinksoda
There is still room for quality payment services like this. In particular,
high-risk and micro-payments, would be great niches to get into.

The primary problem is that to do this right, you will need to spend a lot on
legal fees or find a lawyer to work for equity in your idea(you wouldn't even
have a single customer yet).

I've run the scenario a million times and I would love to create a start-up
that can disrupt, maybe even revolutionize the payment processing industry. My
friend runs one of the big PayPal sucks sites, and makes several million
collecting residuals by forwarding angry PayPal customers to open a real
merchant account. I've seen first hand every possible complaint and gripe you
can imagine.

Someone find me a VC that wants in on this. I'll take a $1 salary.

~~~
il
Even if you avoid fraud and the payment processors, the US government will
almost certainly shut you down. They don't like competition.

See e-gold,1mdc, Liberty Reserve,Phoenix Dollar,etc,etc - pretty much anyone
who has tried to create an alternative currency or payment system.

~~~
tudorw
anyone accepting bitcoin?

------
mkramlich
I love to see reactions like that from entrepreneurs because _sometimes_
that's what should happen. Some ideas -- at least in their present form and in
the present context -- are just dumb and need to be abandoned so folks can
move on to something else.

