Internet Tech Boston

I recently had a chance to talk with Abby Kirigin, co-founder and CEO of TipJoy, a Y-Combinator startup that recently landed it’s Series A funding. I was first introduced to TipJoy when I met Ivan Kirigin, co-founder and CTO, at O’Reilly’s Ignite Boston 4. Since that meeting, I became intrigued in the idea of online micro-tipping and have since included TipJoy on my own blog. Thanks to both Abby and Ivan for taking the time to answer my questions.

Mamet: What need does TipJoy fill in the marketplace?
Kirigin: Web2.0 can be defined by two major trajectories:

1. The web is becoming more social. More often, you get to know the real person behind the content you consume. Now just like in the real world, consuming content online has become a social experience. People feel connected to those who provide the services they enjoy, and are looking for ways to connect with them and say ‘thanks.’
2. People are taking advantage of the fact that the web is essentially the greatest publishing platform in history. For most creators, the biggest problem they face is with obscurity. The solution to that is to post almost everything online for free. This is great for the consumer, because there is a flood of delightful things online. Content is increasingly published under a flexible and open license like Creative Commons, with direct fan contributions to support the continued creation of content. But up until now, there really hasn’t been a good way thank people or earn money for free content.

Tipjoy is a service which enables people to give money to the people who make the stuff they love online, and also earn money for making the great content that people want to tip. Tipjoy enables content creators to make money while providing their content for free. Up until now, the primary way to monetize free content has been through advertising. But ads can be distracting and annoy readers. There are also other donation buttons out there, but they require a multi-step checkout process, which most people don’t bother doing.

Now fans can connect on a personal level to the people who make the stuff they love. And the great stuff they support can be automatically shared with their friends.

Mamet: How does TipJoy make money, or plan to make money?
Kirigin: Tipjoy takes a 3% cut when users withdraw cash from our system.

Mamet: As a Web 2.0 software company, how have you been helped or hindered by being located in Massachusetts, as opposed to California?
Kirgin: We were in Silicon Valley from January - July 2008. It was a great experience and I would recommend that any startup spend at least some time out there. The startup environment is extremely vibrant, with nearly constant quality networking events to attend, and an seemingly unending list of angel and VC investors with whom to speak. SV is really the center of the startup world, and I think that it helps to at least experience that for a bit. That being said, we are very happy to have returned to the Cambridge area. Our lead investors are headquartered in NYC, so being here means we’re much closer to them. Boston and NYC are hubs of the banking & finance, and media & advertising industries, both of which are very relevant to Tipjoy. The colleagues you meet in Cambridge have interests much more varied than you’ll find in SV, which makes for a more complex and dynamic scene. Also since the startup scene is smaller, it can be much closer-knit and stronger. We’re excited to be back and to connect with other startups in the area.

Mamet: On August 28th, Seth Godin caused quite a stir when he stated that the best way to thank a blogger for good content was to click an ad. Many stated that this was tantamount to click fraud. What are your thoughts on that?
Kirigin: We wrote a blog post response. Below is the text from our post:

Seth Godin recently told us all to click ads on sites we like.

Of course, it’s our opinion at Tipjoy that instead of clicking ads, it would make much more sense to leave the content creator some money directly. Cut out the middle man, and do it without leaving the page, and certainly without being taken to an annoying ad page.

But now, let me talk a bit about why I think Seth wrote this, and what it means about the web today.

The sentiment of this article is spot-on: if you’re not paying for all the free stuff you love online, you’re “starving great content”.

This post is yet another great example of how the world is starting to change their mindset around digital content. At first, content creators tried to make people pay to get everything. That didn’t work; we all turned away. So content creators gave their content away for free, and we all came flocking. Now we are starting to feel a bit guilty about getting all of this great content without having to pay for it: great independent music, thoughtful articles, comics which make us laugh, videos which make us laugh until we cry.

And we’re not just feeling guilty because we’re ’starving’ them. We’re feeling guilty because increasingly, we’re not just content consumers. We’re content producers ourselves. In this world of mashups, remixes and samples, the lines between producer and consumer are blurred.

As I read Seth’s article, I scanned the page for ads to click on, and what I found were links to his books. So perhaps Seth’s motives are not entirely altruistic. And that’s absolutely fine.

Let’s all continue to distribute the great stuff we make for free. And let’s make money from it.

Mamet: You’ve recently announced a TipJoy API Beta. Tell me about what you hope to accomplish with this feature.
Kirigin: Our Platform API enables content hosts to split tips with content creators. With a simple opt-in, an entire site’s contributors can start earning money with Tipjoy. The site earns a cut of the donations as an affiliate fee. This structure is great for everyone: Platforms can offer their contributors a way to earn money without resorting to ads, and contributors can quickly and easily start earning money without having to go through any sign up processes with a 3rd party.

Site owners can apply to be part of the beta by going here: http://tipjoy.com/platform

Mamet: If you had a 2 minute audience with all the millions of bloggers that don’t have a plan to monetize their content today, what would you say to them?
Kirigin: Ads bring in revenue for a site, but they don’t help make a connection between the author and the audience. More often, they take readers away from the content, or just annoy them. Tipjoy lets your audience engage directly with your site to help monetize. Since Tipjoy is social, your content will be shared among friends and broadcast on social networks like Twitter and FriendFeed.

social media blogging, tipjoy