[dboreham]

Having run a small (100K users) SaaS company and seen some of this first hand, this is interesting. We never automated any of this, rather just communicating with customers asking them to try another card, or in extreme cases getting them to send a bare PayPal transfer then manually provisioning the payment against their account. I also worked for a startup in the 2000's that had the exact same conceptual idea, but applied to a somewhat different specific use-case.

However, that's not what really makes me curious about this, which is: how do you make this a business? If someone explained this idea to me cold I'd immediately say "that's not a business, it's a feature of Stripe/PayPal et al". From a technical perspective the integration with the customer's (customer of FlyCode) systems seems challenging.

[TZubiri]

It can start out as a business and then get acquired by a bigger business like Stripe, paypel, business, mercury. Either by purchasing the company whole, or by contracting to implement the feature on their systems.

[freedomben]

I agree, that seems like the most reasonable exit strategy. From what we know of the model, it's something that could reasonably get built by Stripe into Stripe. I wouldn't be surprised if they're already working on something like that.

[DowagerDave]

I worked in Ecommerce with a company that built sophisticated subscription solutions well before Shopify had a real offering. We took significant VC money, then watched Shopify build out their own solution to service the now proven market. I'd expect them or Stripe to do the same thing here; it's way more common than buying the first mover or hiring them to build it, plus YC has no interest in this sort of business model.

[JakeVacovec]

We make the integration process nearly effortless for our customers -- we've built apps for Stripe and Shopify and have plans to build out more. Pricing is a flat SaaS fee based on recovered revenue. If we help businesses recover 20%+ more on average the business model is a simple ROI equation.

There's many opportunities to expand our value throughout a payments journey. Merchants rely heavily on rule based business logic for payments and continue to add more rules over time. The expansion opportunity we see is to provide dynamic logic/decision day 1 without all the internal development/iteration.

[npollock]

doesn't Stripe have an interest in maximizing this revenue recovery? they earn a percentage of successful charges

[JakeVacovec]

It's a diminishing returns problem... If they charge 2.9% + $.30 as their standard pricing, they are only keeping a small % of that as the issuer (Chase) gets the largest piece of the pie and the network (Visa) takes their cut too. If each declined authorization costs Stripe $.25, each attempt chips away at their margin.

[justchad]

Profitwell does a version of this and they charge a percentage of the recovered funds.

[JakeVacovec]

We offer both -- those with seasonality like % vs. our largest like a flat SaaS fee so it's a clear line item in the budget.

[artur_makly]

We use them for this and it pays for itself.