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So long, and thanks for all the fish
- 10ren 17y agoWith your attitude, it's just a matter of time before you succeed. BTW: I appreciate your analysis. It reminds me of how hard EDI is to get started without a dominant trading partner who mandates it, such as a dept. store or supermarket chain.
- icey 17y agoI'm sorry to hear it you guys; best of luck with your next venture!
- CamperBob 17y agoTheir efforts might have borne more fruit if I could have actually paid for the tips I owed. Every time I clicked on a link to pay them, I'd get an unhelpful error message along the lines of "The cash-out feature is temporarily down for maintenance." This situation either lasted for a couple of weeks, or was broken all three times I tried over that period. I thought Tipjoy was great in concept, but ultimately they didn't seem to have either the technical or marketing chops to go up against other systems like Amazon's.
- ojbyrne 17y agoSad. The thing about "ramen" profitability is there's another level to be achieved after that, which I refer to as "opportunity cost" profitability. It's often much more challenging, and I sense it being an issue in this article.
- ivankirigin 17y agoWe weren't ramen profitable. We ran out of money and didn't have a good environment or case for raising more.
- auston 17y agoI've been following you guys for a bit and wonder did you guys really spend over $1m since inception? (http://www.techcrunch.com/2008/09/24/tipjoy-raises-1-million-for-its-simple-micropayment-platform/ http://www.techcrunch.com/2008/09/24/tipjoy-raises-1-million...)
- ivankirigin 17y agoWe were advised (in retrospect incorrectly) to be ambiguous and say "raised under $1M" when the amount we raised was actually much less. Our burn rate was slightly higher than most poor grad students, but not _that_ high.
- nreece 17y agoWe were advised (in retrospect incorrectly) to be ambiguous and say "raised under $1M" when the amount we raised was actually much less. Advised?! By whom.
- medianama 17y agoYC?
- drusenko 17y agoI could be wrong, but that doesn't sound like the type of thing YC would advise...
- ivankirigin 17y agoNo, not YC. This issue isn't that important. If investors don't like the way we spent their money, that matters. Confusion on a blog doesn't matter.
- petercooper 17y agoYou sound surprised but this is extremely common in smaller deals IME.
- deleted 17y ago[deleted]
- sho 17y agoActually that's an excellent point that I don't see mentioned enough. Profitability enough to offset opportunity cost - ie, how much you'd be making if you were working in a "real job" - is indeed very hard to reach. Anyone can be "ramen profitable", defining that as say, under $1k a month. In fact, in actual good countries, you don't need to do anything at all to be able to eat. Australia will pay you $1k/month just to not be a criminal; in other countries it's higher. People can and do live off that their whole lives! Your average HN reader/startup founder is generally highly capable, multi-skilled, and, probably, a very valuable employee. To start a business capable of matching or exceeding their likely "normal" salary is indeed a far harder proposition than just making enough to eat.
- angusgr 17y ago>Australia will pay you $1k/month just to not be a criminal FWIW, this isn't strictly true, at least not in the last 10 years. Provided you are not disabled or retired, Australia will only really pay you ~$1k/month while you demonstrably look for work, or while you are an undergraduate student doing your first degree.
- dejb 17y agoThere's a program called NEIS which would pay you that amount for a year while you try to start up a business. You had to submit a pretty serious application and attend a fair few weeks of some business course. They do have a few BS rules but you really just have to structure things the way they want. Did it about 13 years ago and helped me and a friend get a successful startup going. Come to think it of it it was a bit like a govt version of YC.
- sho 17y agoWell .. in theory yes. But in practise, people stay on it for years and years, just putting up with the hoops they make you jump through. Apparently they stop even pretending to care after a couple of years. I know this because a couple of friends of my brother have been on the dole for literally 10 years. There is nothing wrong with them, they just don't want to work and are apparently happy to live within the constraints of their $450/fortnight. Places like Broome and Byron Bay are full of such people. I used to resent people living off the system like this but now having lived in countries without it, I don't mind it anymore. In fact I now support a Norway-style basic income program. They're never going to work, that is completely obvious, just give them the damn money...
- drusenko 17y agoSorry to hear the news -- wish you both the best of luck going forward!
- ivankirigin 17y agoThanks!
- michaelneale 17y agoAnd thanks for taking the time to answer the questions here !
- immad 17y agoI second that. Looking forward to seeing what you do next.
- zackattack 17y agoI know hindsight is 20/20, but would you be willing to be completely forthright and tell us what your business plan was at the beginning stages, when you were raising money? I would find that sort of insight very valuable, and appreciate it greatly.
- ivankirigin 17y agotake a cut
- zackattack 17y agohow did the math work out, taking a cut of tips (presumably small, and even smaller after payment processing fees?) how many users would you have needed to reach profitability? i actually tried doing the back-of-envelope math for your site a while back, and was perplexed. i'm curious as to your answer..
- ivankirigin 17y agoTips don't really work. You need to sell stuff. Branding in the name sucked when we were pushing long and hard* to become a general purpose payments company. Our twitter API could power a full freemium model, subscriptions, etc. - but not enough apps on twitter used it. *twss
- adrianwaj 17y agoDid you ever see http://www.harmony-central.com/Features/Fairtunes/ http://www.harmony-central.com/Features/Fairtunes/ - tips for music artists in 2000 that closed down. For musicians, what if there was a way to offer downloads or a virtual chatroom where musicans could interact with tippers only. Artists could keep log of all their fans. The problem may have been a tip niche wasn't honed in upon.
- cunard-n 17y agoInteresting. So, what became of Goyer and Cormie? I'd like to hear more about their experience. yr. 2000 was early days!
- sho 17y agoSurprised to hear it. I thought you had plenty of "mindshare", around here at least. Guess that doesn't translate to actual dollars. Good luck in your future endeavours. Hopefully it's been a positive learning experience. Look forward to seeing the next big thing!
- ivankirigin 17y agoThe learning experience has been astounding. I have a bunch of things I will do differently next time. Karma on new.yc doesn't translate to usage unfortunately. And twitter as a marketplace is about as mature as @ev's kid.
- deleted 17y ago[deleted]
- ivankirigin 17y agoIn this case, it is because payments is a regulated industry. It's a bad idea to casually hold money for people.
- jack7890 17y agoProps to Ivan for getting on here and giving frank responses to nearly all of the questions and comments.
- jack7890 17y agoWas the shutdown at all related to the need to get licensed as a money transfer agent? I know that's a very expensive process (since you have to go state by state) and I know you guys were thinking about doing it. How did that end up playing out?
- ivankirigin 17y agoLack of traction was much more important.
- nostrademons 17y agoYou gave it your best shot. Best of luck on your next venture!
- tjic 17y agoHaving launched a few ventures, I've learned that smarts and hard work are not most of the story - having the right venture is. Tipjoy struck me, from the very first time I heard of it, as the entirely wrong idea. It "solved" a problem that didn't really exist, competed with multiple existing solutions, and I couldn't figure out who the customers were supposed to be. I will say that ivankirigin came to his senses and abandoned his bad idea far faster than I came to my senses and abandoned various of my bad ideas, so hats off for that.
- sabon 17y agoThe whole story seems to repeatedly wave the arms and shout: "Hey, Twitter! Hey, Facebook! Here we are! We know how to do this! Hire us, hire us, hire us!!!". At least that's how I read the story. And I'm quite convinced it's their intent. Which shouldn't be a bad thing too.
- brk 17y agoSo?
- ivankirigin 17y agoThat's a pretty bold statement, and on the face of it incorrect. Our messages was first and foremost to assure users that their money is still there. And then we made a comment on the market that we failed to succeed in.
- sabon 17y agoWell, of course customers' money is the most important thing, no doubt about it. But it struck me that you mentioned several times in the article that you know what and how to do, you just don't have the leverage of being the main body. Why would you deny it? Is it something bad? I don't think so. Would you refuse if Twitter or Facebook approached you with a decent offer?
- ivankirigin 17y agoWriting a blog post like this would be a lame way to get the attention of any future employer - that's why I'm complaining. You're questioning my motivations, which you have no insight into. Whether I would choose one thing or another is irrelevant. If I wanted to get the company bought, or get a job, I'd just have a conversation with any of our awesome advisers to get directly in touch with pretty much anyone.
- keltecp11 17y agoStupid Market...
- thetrumanshow 17y agoDownvoted the best comment? That does it. I am going to start at the bottom of the comments from now on. :)
- ivankirigin 17y agoIt is a stupid comment, without much content. Like the other reply, even if I agree, this is no way to say it. Our announcement is essentially saying the same thing, but elaborating to add information.
- thetrumanshow 17y agoI thought it added levity and gave a gentle ribbing (did you think it was harsh?) {shrug}... I've said the same thing when my own startups closed.
- ivankirigin 17y agoI'm approaching this from a news.yc community perspective. Feel free to tweet about it :)
- shimi 17y agoI wouldn't use such a harsh words, but probably share the opinion
- ryanwaggoner 17y agoThis is really sad news...we had the pleasure of working with them to integrate the TipJoy API on an experimental project called MightyTweets. Even though our project didn't go anywhere, they were fantastic to work with. I wish them the best of luck in whatever they do next!
- CulturalNgineer 17y agoSee Chagora (dot) com and CulturalEngineer.blogspot (dot) com (why chagora, live debate function and other related posts) for the role of the Pooled-User-Determined Account and the microtransaction as essential in politics and a catalyst for enabling the practical micro (and other)transaction in charity and commercial areas. The political microtransaction is a fundamental of speech. I believe this could have made Tipjoy workable. Sorry I couldn't reach you. I tried.
- fallentimes 17y agoPlease don't.
- CulturalNgineer 17y agoI understand... and will consider it. But could you give a clearer evaluation since I've put a great deal into this and would appreciate more helpful feedback. Thanks!
- sanj 17y agoWhat about poker night? Still hosting it in Arlington?
- tdavis 17y agoAlan (of Cloudant) is tryng to take the reigns but we haven't had lot of interest (granted, only a couple days notice this week). Subscribe to boston-startup-poker@googlegroups.com for more info.
- ivankirigin 17y agoYes, use the google group in place of the meetup. http://groups.google.com/group/boston-startup-poker http://groups.google.com/group/boston-startup-poker
- tdavis 17y agoSorry to hear, my friend. I had a hunch it was coming; why move back to SF unless you were soon to be in need of a job (or fresh investors for TipJoy 2 ;)? I'm, impressed though. You stuck with it for a long time and handled the shutdown right and without a ton of fanfare. If only you hadn't lost all that money to me in Poker, you might have been able to keep running... ;) Give Abby my best!
- ivankirigin 17y agoDamn the semi bluff! The move to the bay area was independent of the shutdown. There are so many more opportunities, for biz dev, investment, talent, acquisitions, etc.
- maxklein 17y agoI called this one also: http://apps.ycombinator.com/item?id=200025 http://apps.ycombinator.com/item?id=200025 Another YC company that will soon be going under or losing its founder will be loopt.
- unalone 17y agoOh? I'm interested in hearing your logic. I see no point to Loopt and think it looks cheap, but it's expanded to the point where it's mentioned in TV commercials, and its founder is Paul Graham's golden boy. I'm asking because your logic re:Tipjoy was sound, and I'd like to see a similar argument for Loopt.
- ivankirigin 17y agoI don't think you understand the direction we were going in. We would largely agree with the assessment on purely voluntary donations - and we were evolving to be a general purpose payments system. You could mandate payment.
- catch23 17y agoLoopt is supposedly profitable in 2009, which means they've had profitable quarters so far. Unless they do something that significantly causes money drain, they'll be able to continue for a long time. Hard to compare to TipJoy when the founders have said they were never pulling profit.
- deleted 17y ago[deleted]
- gehant 17y agoBest of luck to Abby & Ivan in their future endeavors It's refreshing to see this communal response to the closing of a startup rather than the typical icy headlines with droves of disconnected commentary...
- yankeeracer73 17y agoFor sure; it's always sad when these things happen because this community especially knows how hard all these people have worked whether their ideas ultimately panned out in the end or not. A complete 180 from Techcrunch comments where assholes seem to rule.
- rsheridan6 17y agoThis is a little meta, but to what extent does the fact that companies die like this prevent adoption of new services? If I had a business, I'd hesitate to make it dependent on or spend a lot of time integrating with some small startup that stands a fair chance of going belly up next year, and as a user I'm not about to do something like, say, spend a lot of time picking my favorite music for some music recommendation site when they might die at any time.
- deleted 17y ago[deleted]
- known 17y agoTrue scientists celebrate their failures.