Change Agent

How Jonathan Suter built a company by letting customers pay what they want

Keeping costs super-low allows online tax-filing service SimpleTax to charge customers nothing—unless they feel like paying.

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Jonathan Suter, founder, SimpleTax

By keeping expenses low, Jonathan Suter was able to make his tax-filing service donation-only. (Pooya Nabei)

Jonathan suter founded SimpleTax three years ago with his wife Allison (a former tax attorney) and his childhood friend and coder Justin Reynen. The software earned plaudits for its intuitive interface and pay-what-you can pricing model.

“It was tax season at the time, and I was working on my taxes with a product that no longer exists. I asked Allison, my wife, ‘Why isn’t this getting better?’ For something that needs to get done every year by tens of millions of Canadians, why are we not seeing more innovation in this industry? Surely there must be a better way of doing your taxes than software that was designed 10 or 15 years ago.

Design is very important for us, and I think there’s been a renewed focus on well-designed products over the past few years. It’s very easy for entrepreneurs to continuously add features and new things to their product. But I think it’s important to think about what your product is not going to do. What is it not going to have? So, in our case, we don’t have ads. We don’t have upsells. We got rid of a bunch of unnecessary cruft on the outside of the screen. And we don’t have a price.

Are we going to maximize our profit with the ‘pay-what-you-want’ model? Probably not. But if we get lots and lots of people using our product, a certain percentage will support us. That just has to be larger than our costs, and our costs are very low. The cost for us to process a return for somebody is fractions of a fraction of a penny. We have people who e-mail us begging us to charge money, because they’re petrified we’re going to disappear. But the fact that we’re still here means the model is working.”

READ: Why are some Canadian companies paying almost no tax? »