Archive for March, 2011

Chargify is a journey

It’s been 2 years since I departed on friendly terms as CEO/co-founder of Engine Yard. I started writing this blog post a few nights ago at Epicenter Cafe in SF, just a few blocks away from EY. Feels like yesterday that I was checking out 300-sq-ft condos above Epicenter and wondering if they’d survive in their semi-odd spot on Harrison.

Six months after I left EY, I found the folks at Grasshopper Group in Boston, who had been developing Chargify for a little while. I joined the team, invested some money, and helped (along with everyone!) build a great service and company-inside-a-company.

Fast-forward another 18 months and Chargify has signed up thousands of developer accounts and hundreds of running businesses on our platform, from tech startups and fitness coaches and real estate services to well-known companies like Scribd, Opscode, and Get Satisfaction.


I was at SXSW last weekend and met a dozen Chargify customers. They’re all happy. They’re running interesting businesses, with Chargify taking care of all the stuff around… I’ll make up a term… “CLRM” (Customer Lifetime Revenue Management).

It’s just not “billing” or “charging” a card. It’s a whole lifetime of managing customers and revenue.

All of those customers from SXSW have cool ideas for us to build into Chargify. They’re giving us the feedback that helps one grow a good idea into a great idea.

We want to delight customers by giving them a great experience, from releasing improvements to answering phone calls & support tickets. But I want to do even better. I want customers to say, “Whoa, that is sexy! I never even thought of that!”

Grasshopper is a 45-person, profitable company. They can invest more in Chargify, but they have a number of ideas they’re funding, and they’ve already invested a decent amount to get Chargify near break-even.

Chargify is close to break-even, so we can just stay on the path we’re on more or less forever. In fact, doing so is tempting because it’s simple and requires no change.

So it’s the age-old question of growing with profits or growing ahead of profits. Once your business is profitable, you can decide if you want to grow with profits or ahead of them. Many businesses grow ahead of profits by using credit or external investment. (In this paragraph, I’m leaving out the whole issue of how you get to profits, which takes some investment up front.)

For readers interested in what it costs to get something like Chargify going, we’ve invested enough to buy a very nice house in most parts of America! I consider our use of capital very efficient, given how much we’ve created and the breadth of talent involved. We have 24/7 support, a dev team, a web & marketing team, NOC team, PR, HR, Finance, Legal, and everything else that our customers rely upon. Being grown within Grasshopper makes this possible.

Investors have been interested for a year. Now we’re at a point where it makes sense to consider.

It makes sense because: 1) The need for our service is obvious; 2) We can continue without investment; 3) Investment would bring greater richness of ideas & experience, as well as money.

So, if you’re interested in joining us, please follow/DM me on Twitter or email me. Contact details are on the right.

And, btw, I want to call out the great contributions of people who’ve already helped us largely for free. Some great folks out there have helped us delight customers with contributions of sample code, help with support tickets, software to integrate Chargify with other systems, etc. We, and our customers, are grateful!

Fun Stuff & Business History



I co-founded Parallax in 1987 with my best friend. We were both fresh out of high school. We grew from a bedroom operation to a $3M/yr business.

I learned a TON at Parallax! We strugged for several years to find a market we fit, but once we did, were were able to "pivot" (today's term!) into that market and then execute on manufacturing, marketing, and distribution. We didn't even know the term "VC", so we *had* to make money! We took $20K from friends & family and had day jobs to bootstrap those early years.

As I left Parallax in Winter 1996, Radio Shack started carrying our BASIC Stamp computer.

I spent a few years trying to make money in the mobile-messaging space. Unfortunately, I learned lessons about how to spend all of my cash chasing a market that simply was not yet developed enough. I wish I had known about VC :-)! I closed up shop and put up a notice saying "goodbye" to my customers.

Which led to a San Francisco VC-funded startup in 1998. They were in the mobile-messaging space and were on the normal VC route as everyone else back then. Unfortunately, it didn't end pretty, but my friends and I learned a lot through the CEO, who was nice enough to tell us how things worked with his Board, the investors, etc.

I got laid off along with most other tech folks in SF in 2000. What does one do at a time like that? Start Quality Humans, Inc. as a way to offer my programming services to clients. QHI grew to employ 8 guys working around the USA.

My friend and QHI consultant, Tom Mornini, saw Ruby on Rails coming over the horizon, so we started offering Rails consulting. Within a few months, Tom noticed that Rails clients didn't want to worry about details; they just wanted to deploy their apps.

That led me to co-found Engine Yard in 2006 with Tom, Ezra Zygmuntowicz, and Jayson Vantuyl. We built a great business and then took VC after a year from Amazon, Benchmark, New Enterprise Associates, and others. I served as CEO until Jan, 2009, when we started building an executive team who can take EY up a few more notches.

I reflected on major pain points we experienced at EY, and recurring billing was one of them. That led me to Chargify.

In Chargify, I joined great folks from Grasshopper. It's been very cool working with the team as we grow Chargify in 2011.