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Feedback on my MVP please?

Hi Everyone,

I've been on here for a while and you guys have inspired me to launch a side project:

https://4o2pay.com

The premise is that ads are not the best way for publishers to make money. A simple micropayment system would let people pay publishers for good content.

There has been a lot in the micropayments space before, but none of it has been really simple. That's been my goal with this.

What do you think?

I should probably go talk to customers now. How should I go about doing this? Advice on who I should be contacting?

Thanks!

Fernando
_fernando Send private email
Friday, May 17, 2013
 
 
Er, it's late. The URL is:

https://402pay.com

Mods, could you pleas change the URL in my original post? Thanks!
_fernando Send private email
Friday, May 17, 2013
 
 
Very nice idea and I wish the very best of luck with it, but there are a few obvious questions that your minimal website/UI doesn't address:

As a reader, I assume there's a minimum payment I have to make in order to create an account - you need to tell me what that is before I give you my email address.  A link to your terms and a no-spam promise would be good too.

The demo lets me read the content anyway.  How does that work?  It makes it look like a suggested donation rather than a fee, in which case your $15 CPM minimum is going to bankrupt you.  :-)

You need to differentiate yourself from current micropayments systems like Flattr.

As a web developer I'm a bit skeptical that your system takes 60 seconds to install and yet works properly.  You need to explain in at least a small amount of detail how the system works.  (If the content is delivered to the browser but then hidden with CSS/JavaScript, the knowledge of how to defeat it will become easy to find very quickly, and it won't be long before some freetard builds a browser plugin to automate it.)

As an author, I'd want to know how this system works alongside search engines.  Can the search engines see my content?  A shortened version of my content?  How does this square with the search engines' policies on cloaking etc.?

(Did you get Paul Graham's permission to use his content in your demo, by the way?  If not, boo to you.  If so, you might want to include "Demo article used with the author's permission" or similar.  Authors are justifiably sensitive about that kind of thing.)
Richie Hindle Send private email
Friday, May 17, 2013
 
 
It didn't make any sense to me at all. Is it supposed to block the content so I have to pay before I read it? If so the live demo didn't make any sense.

Or is it supposed to be like a tip system for people who write great content? Either way I don't see how I will work in the current form.

Ads on blogs work because people click on them if they find them interesting. If I find a good article on a blog, I do make a point of clicking on some ads, as I now this will benefit the author.

However, it's a massive ask for someone to sign up to an account to pay someone 3 cents. If I can read the content without paying than I would rather do that.
Andrew Gibson Send private email
Friday, May 17, 2013
 
 
@Andrew: My view is that you do the author a disservice by clicking on ads that do not actually interest you and hence do not lead to purchases of the advertisers' goods or services. Those clicks-that-do-not convert make the blog less attractive to advertisers.
Dmitry Leskov @Home Send private email
Friday, May 17, 2013
 
 
So it is essentially a donate button?

It cannot block the content because no blogger in their right mind would install a blocker with no user base. So it has to allow to read AND ask for money, which is a donation model.

What would make a blogger to choose 402 over Flattr?

Asking for CC and registration is kinda break the reading flow. I do not expect the visitors to do it.

How about this?

- Put a button "I promise to pay for this content later" and "No, thanks" when the visitor is on the page
- Many users browse while logged into Google, Live, Facebook etc. Use OAuth to grab their email. They will be asked for permission, but this is one click. They would likely grant.
- At the end of the month send them a summary notification note: "Hey, you have read these great articles which you said you will pay for (list follows)"
- Now sign them up if they are not yet, get CC like gumroad.com does (nothing unnecessary)
- Pay to the bloggers

Benefits:

- No need to sign up until later, doesn't break the flow much
- Blogger can assign the asked price to the view (unlike Flattr)
- Reader can later choose which ones was worth the read (unlike Flattr)

Not saying this is perfect, but at least it has a differentiator.
Vladimir Dyuzhev Send private email
Friday, May 17, 2013
 
 
You'd need at least 50 million dollars to have a small chance of making this idea work. You need to convince users and publishers to sign in, it's not a small task. It's like eBay: so easy to create a buyer/seller network, you can buy a eBay clone for a few hundred, but how to convince sellers and buyers to use it? This is the famous network effect. It works both ways, it's hard to create and even harder to fight it.

If you don't have 50 million dollars and can't find investors, I'd suggest you to find some idea that you can make work with the resources you have.

For example, I'd love to create a new operating system, or a new smartphone, or a new office suite, but as I don't have the resources, so for me they're just good ideas. I must find one idea that myself as a lone programmer can make a reality within a few months. IMO you should do the same.
Mauricio Macedo Send private email
Friday, May 17, 2013
 
 
Thanks everybody for the feedback!

Responses below:

@Richie:

Minimum payment:

So the plan is to give people $5 for free to start. I should probably be more clear about this -- would you have any advice on how to make it more clear that users start with $5 for free by signing up on the page?

Installation:

Yeah, it's a single line of javascript that you drop in, looks like this:

<script src="https://402pay.com/static/plugin/402.js" pubid="1"></script>

I'm not really worried about people installing a plugin to work around this.  I don't think I can solve people getting the content for free, but if someone is willing to do 1 minute of work to save 3 cents then I don't really want them as my customer in the first place.

Search Engines:

Yeah, the plan is that this won't modify what search engines see. The design pattern I have in mind is like an ad you see before getting to a page. Example: https://www.evernote.com/shard/s60/sh/c5ee44d0-b08b-4031-a286-a03f1b346e82/901c94a06ad4ee303309b6af0481a711.

@Andrew

I was thinking of being more aggressive and taking up the full screen, but I think it's really hard to force people to pay for information that they could otherwise get for free.

Massive Ask:

What if I framed it as "you get $4.97 in addition to seeing this premium article" by signing up for this thing?

@Vladimir

Awesome points. Will keep this in mind, but I don't know if people would pay after reading the content. Sounds a bit like a credit card model, and cc companies need credit scores to make sure people will pay their bills on time.

@Mauricio

Thanks so much for the advice. Can you think of anyways I could reduce it to something that has a higher chance of working?
_fernando Send private email
Friday, May 17, 2013
 
 
Fernando,

I don't know. The guys of paypal made it work, but they spent a few million giving $10 away for each signup IIRC (research their story). There are just a few content players that can charge for content upfront because they've built a brand, think major journals and magazines. But it's easy for them to create their own solution, why would they give you a cut?

Experts Exchange created a small market, focusing on questions and asnwers, but StackOverflow is eating their lunch.

I guess the best you could do is a micropayment for blogs, so people can "support" a blog they like, after reading the content. More like a donation than a paywall.
Mauricio Macedo Send private email
Friday, May 17, 2013
 
 
How many $5 can you afford to give away?  It's hard to imagine how that will scale unless you've got investors.
Doug Send private email
Friday, May 17, 2013
 
 
Well, he can give away $5 but have a minimum payout of $50 (or something like that). That way he never has to give out the $5 unless he's making money.
Bring back anon Send private email
Friday, May 17, 2013
 
 
I'll probably change the numbers to make the economics work, based on conversions, customer ltv, etc. I think the gist of it is to find out whether giving people free credit is a potential way to have people join.
_fernando Send private email
Friday, May 17, 2013
 
 
>  but I don't know if people would pay after reading the content. Sounds a bit like a credit card model, and cc companies need credit scores to make sure people will pay their bills on time.

What you have to lose? The worst case they won't pay -- just like they don't now.

Would I pay? I have a 3-4 blogs in mind where I'd pay for every single post. In fact, I do not read others (consistently).

What a once-a-month gives you, besides the points I mentioned before, is the relatively smaller fee to the CC companies. If you charge $1, you'd pay $0.50 or so to CC company fee. Or something like that.

Now, pay once a month to 10-15 blogs, and you have one time payment of $10-15, and still the same $0.50 fee.

You were told correctly that you're trying to create a market from the scratch. This is an enormous enterprise in itself, and the last thing you need is to compete directly with established services such as Flattr.
Vladimir Dyuzhev Send private email
Friday, May 17, 2013
 
 
> I think the gist of it is to find out whether giving people free credit is a potential way to have people join.

I don't get that one.

You give a man $5 in credit money. The man spends it onto a blog. Fine. Now you have to pay that blogger $5. Would you?

Where is the budget coming from?
Vladimir Dyuzhev Send private email
Friday, May 17, 2013
 
 
The $5 in free credit doesn't have to be real money. You could have a dashboard for content providers that displays the number of free credit visitors vs paid visitors.
Nicholas Hebb Send private email
Friday, May 17, 2013
 
 
@Vladimir my thinking is that it would be okay to give them $5, even if you're actually paying $5 to the publisher, as long as customer lifetime value is more than $5. If you look at it that way then it's a customer acquisition cost.
_fernando Send private email
Friday, May 17, 2013
 
 
> my thinking is that it would be okay to give them $5, even if you're actually paying $5 to the publisher, as long as customer lifetime value is more than $5

OK. You may need to have a large budget to burn through before those payments will start to cover the credit.

...

$5 acquisition cost at 5% fee means the user should spend about $100 before you recover your costs.

If $5 is also an average monthly spending, you'd need on average a 20 months membership duration before breaking even.

In other words, you'd be burning cash for at least 20 months.

...

I feel the "training $5" idea way is a way safer approach.
Vladimir Dyuzhev Send private email
Friday, May 17, 2013
 
 
If you haven't decided on the product/site name yet maybe you should reconsider that '402pay' thing.. It momentarily remids me (and  probably others) of 404 error page.. Maybe that is isignificant but in marketing world they pay much attention to such things
alexandar Send private email
Saturday, May 18, 2013
 
 
I agree 402 looks like an error message.
Reluctantlyregistered Send private email
Saturday, May 18, 2013
 
 
Well, for a Canadian 402 sounds like a highway name.

But I would be interested to hear the etymology of the name.
Vladimir Dyuzhev Send private email
Saturday, May 18, 2013
 
 
Great question.

In the original HTTP spec, HTTP 402 means Payment Required.
_fernando Send private email
Saturday, May 18, 2013
 
 

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