Balanced will be adding a new feature to its arsenal of payments features in the coming months, allowing customers to push payments directl...
Balanced will be adding a new feature to its arsenal of payments features in the coming months, allowing customers to push payments directly to debit cards. But this product development cycle comes with the support of a number of customers asking for the feature, who are backing the feature with a crowdfunding campaign.
This idea of “open source product development” isn’t exactly new to Balanced: The Y Combinator alum has long depended on customers and partners to help it determine which features it should build into its two-sided payment platform.
Using Github, the team discusses its product cycle and uses community feedback to help it prioritize resources around the development of features that are most requested or could prove most valuable to its clients. That led to the team building out features like the ability to do ACH bank deposits to its platform.
“We advertise ourselves as an open company,” co-founder Jareau Wade told me. “Our code is often open source, and our default is to provide transparency in product development.”
The next step for Balanced in determining demand was to seek crowdfunding for new features through a campaign on Crowdhoster. According to Wade, the money raised isn’t necessarily to fund development, since engineering salaries are largely a sunk cost anyway. Instead, the money is for lifetime support of the feature. And crowdfunding is also a good way to help determine actual customer demand.
When it asked users if they were interested in sending payments to debit cards, there was a groundswell of support. But before it decided to build the feature out, it wanted to determine how many would be willing to pay for the feature, and how much. After all, it’s one thing for customers to say they want a new feature — it’s a whole other thing to set a price.
That’s one lesson that came out of its development of ACH deposits, Wade said, as those who supported the feature via Github weren’t exactly happy with pricing when it was actually released. By having clients prepay to be part the initial beta run of the product, it’s essentially having them put their money where their mouths is and vote on how much volume and which pricing plan makes the most sense.
Since Balanced can’t rip out a feature once it’s been added to the API, the company has to be thoughtful about what it implements and how. While the typical Silicon Valley mantra is to move fast and break things, that’s not a luxury that Balanced has as a payments company.
“We can’t break things, but we still need to move fast,” Wade said. “So we’ve changed that to move fast and make things.”
Those who wish to support the campaign can do so for as little as $25 and get a t-shirt, marketplace customers also have the option of supporting in $1,000, $2,500, and $10,000 blocks, each with a different price per transaction. The $1,000 backers are essentially prepaying for 1,000 transactions, while those who spend $2,500 will be paying $0.75 per transaction. The cost for $10,000 backers goes down to $0.50 per transaction when the feature gets rolled out in May.
Balanced surpassed its $50,000 goal in about a day, with major backing coming from customers like Raise, Wanderable, Crowdtilt, and InstantCab. It’s received money from 24 different backers altogether, but still has several weeks to go in the campaign. With the greenlight from backers, though, it’s ready to move forward with the feature, which it expects to roll out in May.
Balanced has raised $3.4 million from investors that include Andreessen Horowitz, CollabFund, Y Combinator, SV Angel, Brian Chesky, Ashton Kutcher, Yishan Wong, and other angels.
