Your Minimum Viable Product is Processing Credit Cards

If you’re building any sort of web service or mobile app and you can’t yet receive money from people – stop. Right now. Stop. For all that is right in the world – stop.

If you can’t process credit cards right now – you don’t have a product and you barely have a business. Your minimum viable product isn’t _would_ someone pay for it at some price, it’s _can_ someone pay for it at any price. You could be selling nothing right now – I don’t care. You need to figure out how to process credit cards. So, the exact moment you have anything to sell – you’re ready to make that first sale.

Sure, there’s still something of a taboo around asking people to pay for software especially browser-based software – and other text work. Something about a culture of free, marginal cost is $0, economies of scale, SEO-findability, marketshare, blah, blah, blah. It’s bullshit. Part of it’s a remnant from a time when processing credit cards was hard, required merchant accounts, and more security than a $90 HTTPS certificate. The other part is people whose business is to turn interesting software companies into massively awkward advertising companies (MAAC) before selling their interest for a huge profit.

Neither of these things really a problem – the high of making your first sale will quickly evaporate both these notions. There’s a reason restaurants frame their first dollar received. That first sale is a vote of confidence, a recognition of value received, and most of all a ‘Thank you’.

Unlike even 5 years ago, there are plenty of services that will happily process credit card transaction for you – from the ubiquitous PayPal, to, Amazon Payments, and Google Checkout, the list goes on and on. For mobile apps – all the app storefronts will handle payments for you. One caveat – you need to price your app above $0.

Not asking for money guarantees you’ll never receive it. Asking for something only improves your chances that you’ll receive something. Based on my experience, for small services 1% of the people will give you an average of $1. This conversion rate can easily cover hosting costs for a year. It only goes up from there.

Though, the primary benefit of being able to take money isn’t really about being able to take money.

It’s about seeing your product through your potential customers’ eyes. Who they are? Which aspects of what you’re building are most valuable to them? What’s the most valuable thing you could build that they’d open their wallet for? Build that atop your payment processing system. Done. With enough customers, we can talk about bundling features into different payment tiers. Even completely different products. That’s down the road. But now that mindset exists, the technical capability exists, more paths to success open up. All in this small shift from $0 to >$0.

This isn’t even specific to building software – this is for anyone that creates something and distributes it online. Late last year I paid $250 for a weekly 5 minute video series. Announcements of new videos are distributed via email (one of the few emails I look forward to each week). The videos themselves live on Youtube. Last I heard, 160 others had paid as well. That’s $40,000 gross – atop an email with a YouTube link – from the sheer audacity of asking for real money for a year of creative work.

23 thoughts on “Your Minimum Viable Product is Processing Credit Cards

      1. Wow… That website looks and reads like an as seen on tv scam money making scam.

        Is it really that good? Am I alone in thinking how shady the site looks/sounds? I’ve never heard of Alan Weiss

        1. Rick – Yes, Weiss is quite well known and credible in his space. The visual sophistication of his website (just like Craigslist) is a nice reminder that aesthetics don’t necessary equate to success.

          1. Yeah – me too. As enjoyable as it is, it’d be more enjoyable if it didn’t happen.

  1. I really, really wish we had Stripe here in Australia.

    Local payment gateways are all quite the same in one regard – requiring significant set up fees to be paid upfront as well as having to link to a business account with a bank (that also has some set up fees).

    Possibly Paypal is an option but I keep hearing various horror stories about it and it doesn’t help.

    1. I’m in melbourne and I feel your pain! You might want to take a look at Braintree – the launched in Australia a few months back. I haven’t used them yet but it looks promising.

      1. Simon, thanks for heads up, Braintree has been actually so awesome that they reached out to me based on this comment alone. Hope they kick some stale asses down here in Oz.

    2. One thing that sort of bummed me out about Stripe is the fact that you need a business number and a business bank account.

  2. I can see more and more people agreeing to the idea that a product should be profitable from the start. We still miss an easy and cheap service to accept payment in france, though. Please, Stripe, come to France.

  3. “You could be selling nothing right now – I don’t care. You need to figure out how to process credit cards”

    I really think it’s more important to figure out *what* you are selling and how it provides value to potential customers. You can find out if people would take money without wasting time building in payment processing – just ask them.

    The most important thing is getting product/market fit as quickly as possible.

    1. Tom – in my experience, and initial implementation of or PayPal takes a maximum of 2 hours. This isn’t days or weeks of effort, it’s a long lunch hour. And at the end of it, is much better positioning, flexibility, and a sales mindset. All of which will makes the conversations with potential customers that much more effective.

  4. By using bitcoin you can receive payments from the entire world (unlike traditional payment processors) with ridiculously low fees (typically half a penny) by completely bypassing those greedy intermediaries.

  5. I have been working on a side project for 3 months. The last portion is the credit card processing. I am going with stripe. While stripe makes it so easy, I definitely should have started with, rather than ended with, this portion of the app.


  6. “If you’re building any sort of web service or mobile app and you can’t yet receive money from people – stop.”

    I kind of took offense to that. Maybe not “offense”, but found myself shocked. What’s wrong with creating and building something not-for-profit? Isn’t that how the open source community works? Sure, jQuery has a “donate” section on their site, but many projects start off on github without a donate button. People build them just because they like to create stuff. The payment stuff comes later.

    If you’re in this game to make money first, then I agree with you.

  7. Awesome advice and more people should take it. It’s one thing to imagine your target market take out their credit card and pay for something but having them actually do it (or not) is where reality will slap you in the face.

    You could even skip the 2 hours of Stripe/PP and go just paypal, but that 2 hours I agree is high value and well spent. Or for some markets get on the phone or meet, present an offer and accept payment.

    I also see that your in the 612 we are in the same neck of the woods, glad to find your site.

  8. Though I’ve setup several payment systems I’ve always found the third party ones a bit mystifying, this post pushed me to try some of the new processing tools out there. I setup Amazon simple pay with an IPN handler in about 20min. I didn’t have an idea for a site so it’s just a novelty site 🙂 I chose amazon over stripe since the micro payment cost is less on amazon (5% + 5c vs 2.9%+30c )

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