This is, FWIW, an absolutely no-brainer move for almost any SaaS business: if a user signals severe financial stress and needs a one-time discount, give it to them. You have two options: a) future LTV = 0 (they cancel immediately) b) future LTV > 0.
This is not a hard call. I have, incredibly, had some people disagree with me loudly on this.
My usual copy for this is: "Don't worry Bob. I've run a small business for 8 years. We've all been there before. Tell you what, I'm comping you the next three months. You worry about getting things humming again, I'll deal with the accountant. [+]"
[+] A little white lie. My accountant naturally does not ordinarily second guess my marketing decisions, particularly when they're numbered in the low three figures, but injecting him into the discussion keeps us honest about this being a matter of business-to-business professional courtesy rather than personal charity (which doesn't have an expiration date).
At low-touch SaaS price points, eating a one-month refund shouldn't take more than an eyeblink of consideration. (That's certainly how long the credit card company will give it when they call to chargeback anyhow.)
I like the post but I think you're incorrect on cause. I don't think it's a matter of how large or small the provider is; I think it's a matter of empowering customer support reps (a rose by any other name: the people you talk to on behalf of providers.)
When the rep has the ability to make decisions and give these small deals I think they often will and your blog post is the reason why: it's not hard to see that the discount was relatively minor (I imagine you're not breaking the bank with your monthly GitHub bill) and by giving it to you their downside is the small temporary discount while the upside is a nice blog post praising them and lock-in loyalty for the rest of the life of your company.
Big company example would be Amazon. Every time I have an issue and email them I am amazed by how reasonable they are in the first email. No "here's a bad offer and I'll go talk to 'my boss' about a better one only once you yell at me", no "sorry you should have read the terms of service" but rather "here's the obviously reasonable solution, have a nice day sir"
How is this a startup solidarity? I'm pretty sure all those companies couldn't care less whether he is a startup or a plumber. They would react the same just on the basis that he has asked nicely and they were confident he can get through it. What other options did they have? Lose him as a customer?
The above linked article is a sensationalist hit piece that's riddled with factual inaccuracies -- about my family, about Amicus, and about me. It adds nothing of substance to the blog post I already wrote about the mistakes I made (http://sethbannon.com/mistakes-you-should-never-make). The reporter grossly sensationalized the story for clicks which, unfortunately, is all too common a practice in the journalism industry these days.
That's a pretty serious accusation to level against a respected journalist[1] writing for one of America's most respected publications. Which items in Schreiber's New Republic piece[2] do you take issue with?
At the very least you are factually incorrect that the article "adds nothing of substance" to your earlier blog post. The things that Schreiber alleges -- being in Boston to handle a lawsuit from a former co-founder without telling your partners, petty lying about purchasing and losing an iPad, concealing the amount of time you'd known about the tax issues, etc. -- were not covered in that blog post and paint a very different picture of your leadership of Amicus than what you've claimed.
And honestly, I wish I'd known about this TNR piece when I read your earlier blog post on Hacker News. I would have seriously discounted your advice if I'd seen how sharply your version of events diverged from those of a respected journalist doing lots of research and making your emails publicly available[3]. I don't know why the parent comment was flagkilled -- Schreiber's allegations raise serious questions about your credibility to offer advice to founders, and as a reader I'd appreciate commenters pointing out the other side of the story.
I was referring to this comment's super-parent, but I didn't know the TNR piece had a Hacker News thread! When I got here, this comment's super-parent just said [flagkilled] and I assumed it was the TNR piece because the New Zealander commenting below referenced lack of CEO vetting -- which is the final third of the TNR piece.
I edited my above comment to clarify that I meant the parent comment was flagkilled.
Wow, what a read. I am surprised that barely any background checks were done by the investors. Considering how hard it is to get any sort of investment funding from Angels in New Zealand, I can't help but feel annoyed at this wasted opportunity. If this is all true, I can't for the life of me understand why he didn't just tell the truth. "rags to riches" and all that -- you don't need "prestige". (well, you don't, do you? or is that how SV works?)
This is not a hard call. I have, incredibly, had some people disagree with me loudly on this.
My usual copy for this is: "Don't worry Bob. I've run a small business for 8 years. We've all been there before. Tell you what, I'm comping you the next three months. You worry about getting things humming again, I'll deal with the accountant. [+]"
[+] A little white lie. My accountant naturally does not ordinarily second guess my marketing decisions, particularly when they're numbered in the low three figures, but injecting him into the discussion keeps us honest about this being a matter of business-to-business professional courtesy rather than personal charity (which doesn't have an expiration date).