I'm not sure why you're viewing GumRoad's funding as a negative.
I look at this as even more validation for my payments startup http://merchee.com, which has similar basic functionality to GumRoad, but focuses on subscription billing, offers affiliate marketing and checkout pages that match your website.
A bunch of really smart people, who see a lot of different products, teams, deals- They are betting that there is a market that will deliver ROI for innovation in the payments space, and they're putting their money behind Sahil, who has done a great job earning their backing. Please consider, he hasn't come out of no where, this isn't a sudden "overnight success". Even more validating is that lot of seasoned investors are doubling down on innovations in the payments space- look at stripe's 1st and 2nd round of funding for example (now with a valuation of $100 Million!).
Your competitor's ability to gain market adoption, traction and to raise funds should motivate you to raise the bar and build a great product, now that you "know" that it's a market that can reward your efforts.
I recommend trying a lower price first, then gradually increase.
1) Your early adopters/ customers will feel like they got a deal. (if you drop the price later they'll feel ripped off)
2) You will get a "baseline" for adoption at a price point, and you can use that for comparison as you increase your price. If your sales decrease significantly, you've hit a value perception/ pricing problem.
We've seen our Vendors successfully test their pricing models this way at Simplified Ecommerce (I'm the Founder)- they can start billing from day one without any coding and easily revise their pricing models in realtime.
"product that we know is very useful for our customers"- For some businesses this can become obvious from metrics like signups and usage- although there is a difference between a "user" and a "customer". Linkedin is a good example by glimcat.
If you want to build a BUSINESS that has a "product that we know is very useful for our customers"- To have a business you need customers, customers pay, and paying customers validate that the product is useful to them, otherwise you just don't really know.
If you would like to start charging from day one with the minimum of time and effort, if you want to get to market ASAP and gain traction fast- check out Simplified Ecommerce. I'm the Founder.
PayPal, Amazon and Google can be great solutions, one confusing thing to keep in mind is that YOUR customers are actually THEIR customers, all the customer data belongs to them, not you. If you ever want to switch providers or you grow into needing your own merchant account, those customers are "locked in".
I'm the Founder at Simplified Ecommerce, and our goal is to help solve this unfair situation for startups and Entrepreneurs.
We're in Beta and working with each new customer closely, getting their feedback and developing what we think is going to be fair pricing when we officially launch.
If you don't have a merchant account, our pricing will be around 7%, competitive with Clickbank, Plimus, Fastspring, etc.
If you already have your own merchant account, our pricing will start at about $70/month and $0.25.txn, competitive with Recurly, Chargify, etc. We're a payments gateway too, so you avoid those additional fees.
Integrations as easy as PayPal "BuyNow" links, beautiful customizable payment pages, affiliate marketing like ClickBank and recurring subscription billing without any programming or complicated API's.
International companies are welcome and receive weekly settlements via Bank Wire (US companies settle with ACH/ direct debit to their bank account).
You can get started right away without going through the long, complicated pain of applying and qualifying for a merchant account. Then as your business grows if you get a merchant account, the transition is seamless, as easy as submitting your new merchant account credentials. All your integrations, products, subscription plans, affiliate relationships, custom payment pages, data, reporting... stay intact.
and YOUR customers' data is YOURS, securely stored in our PCI level 1 compliant tokenized vault and is fully portable.
Especially important for lean startups when considering payment providers for subscriptions is the ability to "take your customers with you" as you grow. When using Paypal, Clickbank, Fastspring/ Saasly, they are the merchant of record, so they "own" the customer data. If you ever want to move to a different provider, get your own or switch merchant accounts... the customers that signed up with these providers will need to signup for a new subscription and submit their CC data again to transition them to your new provider. The other option is you can continue to use these old providers for your existing subscribers, and use your new providers for new customers, but that adds a bunch of complexity for technology, customer support...
There's a lot of good options and great providers, each having their pros and cons dependent on where you are in your lean startup "lifecycle".
About Simplified Ecommerce:
We specialize in subscriptions and our goal is to support a merchant throughout their entire lifecycle; finding product- market fit before they have a merchant account (similar to clickbank or fastspring), affiliate marketing to accelerate their growth, transitioning to their 1st merchant account and switching or adding merchant accounts as they scale.
Throughout their lifecycle, adding or switching a merchant account is as simple as submitting new merchant account credentials. All their custom hosted payment pages, integrations, pricing plans, affiliate relationships, reporting...remains intact. All customer data is stored in our independent level 1 PCI compliant gateway vault and is fully portable.
Our primary market is the non developer. Although Recurly, Spreedly/ Spreedlycore, Chargify and others have great, robust API's, we offer simple copy & paste "Buy Now link" type integrations. Merchants can customize hosted payment pages, switch merchant accounts, add subscription plans and set up affiliate programs in minutes, with just a few clicks. We also provide the consumer interface so subscribers can cancel, up or down grade their subscriptions without any additional integration or programming by the merchant.
I'd love to hear your feedback and happy to answer any questions. We are planning to expand our private beta in the next couple months, contact me if you're interested- Colin at SimplifiedEcommerce.com
I look at this as even more validation for my payments startup http://merchee.com, which has similar basic functionality to GumRoad, but focuses on subscription billing, offers affiliate marketing and checkout pages that match your website.
A bunch of really smart people, who see a lot of different products, teams, deals- They are betting that there is a market that will deliver ROI for innovation in the payments space, and they're putting their money behind Sahil, who has done a great job earning their backing. Please consider, he hasn't come out of no where, this isn't a sudden "overnight success". Even more validating is that lot of seasoned investors are doubling down on innovations in the payments space- look at stripe's 1st and 2nd round of funding for example (now with a valuation of $100 Million!).
Your competitor's ability to gain market adoption, traction and to raise funds should motivate you to raise the bar and build a great product, now that you "know" that it's a market that can reward your efforts.