PYMNTS Topic TBD

Making Startups Pay (And Get Paid)

Every “next big idea” needs a little help getting off the ground to make the leap from dream to reality. One reality is payments — no young business can thrive if customers find friction in payments. In the latest Topic TBD, Plasso CEO Drew Wilson explains how technical details need not get in the way of accepting and making payments for even the newest of firms.

The latest headline numbers focused on the U.S. economy showed a slowdown in annualized GDP growth, to 1.9 percent from as much as 3.5 percent in the third quarter. Part of that slowdown came on reversals of soybean import and export activity. Yet, consumer spending remained strong, and business investment anticipating continued strength showed up in the data, too.

In the latest installment of Topic TBD, PYMNTS’ Karen Webster spoke with Plasso CEO Drew Wilson to get a sense of how smaller firms might view the current economic climate and how new startups can make the jump from drawing board to drawing eyeballs, customers and payments.

Agreeing with Webster’s assessment that smaller firms are enjoying a “robust business environment” within the U.S., Wilson said the business owners joining up with Plasso want a subscription-based business, and Plasso makes it possible for the acceptance of recurring payments tied to online transactions. 

These payments, of course, offer more revenue, with greater visibility, for clients. Wilson added that younger companies — “you could classify them as millennial business owners” — are new to their respective marketplaces, working with Plasso to bring their new business ideas to fruition. “The fact that younger business owners are able to start up without upfront costs,” said the executive, “is huge and enables more businesses to get up and going a lot quicker than they otherwise would.”

Among the business models that are adopting subscription and recurring payment platforms, said Wilson, are ones where consumers order a specific type of item every month, such as coffee, organic food or art supplies. With a nod toward newer business ideas, Plasso has signed on a firm that specializes in what might be called “digital nomads,” which employs people who are “remote and work from the road, and maybe they own their own business or they work for someone else … they travel around with ID, or they travel via plane and go to different countries” tied to projects. They pay a monthly fee to access resources related to such contract work. 

He also mentioned other firms similar to Airbnb where rental properties can be booked and paid for across 10 locations via monthly subscriptions in the U.S. 

Upon questioning by Webster as to what these businesses are doing to get eyeballs on their sites, Wilson noted that each business, on an individual basis, needs to find something “that sets them apart.” He elaborated that many of these startups center on industries that their owners enjoy “either as a hobby or as a lifestyle, and so, for them, it is a little easier to do the marketing, because they already have a view from inside that industry” and already are able to utilize the contacts they have in that arena in order to build a business.

In the actual process of building the business, some technical and even staffing challenges abound, working from the ground up, as firms may have to hire somebody to help build a payments infrastructure, utilizing Stripe, proffered Wilson. Maybe a crowdfunding campaign would have to be launched to hire and pay that technician in the first place. Facilitating payments right off the bat with Plasso, said Wilson, eliminates the need for those fundraising (and tech maintenance) activities.

Some of the companies using Plasso, young as they are, have been on the road to establishing themselves as “the brand in their space … and because our platform is so easy, there are a lot of customers that hop onto it to try out their idea and see if it works.”

Looking toward the future, continued Wilson, goals for Plasso include coming out with products aimed at helping marketing efforts along with sales. Plasso’s customers are optimistic, he said, because, in many cases, they have gone from “having no business before” to seeing uptake, while they “make a good amount of money.” 

The challenge, of course, is making sure that enough customers continue to see the value. Recurring billing only works if consumers have a recurring interest in the product.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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