4 ms·

Sorry to hear about the shutdown. FWIW, I'm impressed how open you're being, about profitability as well as money-raised (http://news.ycombinator.com/item?id=77

by zhyder 17y ago

Sorry to hear about the shutdown. FWIW, I'm impressed how open you're being, about profitability as well as money-raised (http://news.ycombinator.com/item?id=777010 http://news.ycombinator.com/item?id=777010). Btw, apparently you have a decent amount of traffic (http://siteanalytics.compete.com/tipjoy.com/ http://siteanalytics.compete.com/tipjoy.com/). Is the problem that very few of your visitors convert to tippers?

ivankirigin 17y ago
Compete measures iframe includes or javascript widgets - meaning our widgets on 3rd party sites. That traffic is roughly correct in direction, but totally wrong for the volume to tipjoy.com itself. But that doesn't really matter, because it is a service - one usable almost entirely without visiting tipjoy.com. The twitter integration, for example, is completely unmeasured by compete. Finally, traffic is a poor metric for a payments site. Transaction volume is what matters. Ohh, and I'm not being that open. If we were profitable, we wouldn't be shutting down.
- patio11 17y ago
  Transaction volume is what matters Feel free to smack me if I'm prying, but I'd be fascinated to know a rough ballpark for what transaction volume was.
- eterno 17y ago
  Thanks for being so open and honest about the whole thing. You said, if you were profitable, you wouldn't be shutting down. But if you think there should be a way to make social payments work then don't you think its just a matter of time when you would be profitable. I mean minimum profitability also doesn't really justify what is called in other posts the 'opportunity cost', but if you are working on something big and still believe there is customer value then profitability will come eventually. And if that belief is still there then maybe just buckle down for sometime in a paying gig and then go back again. It might take your mind of it for sometime which might actually give you some good insights on how to take it ahead. I though, still understand that there could be other personal reasons for you to do this, in which case please feel free to not respond. Thanks again for the post and best of luck for the future.
  - robryan 17y ago
    If sounds like they would need new funds now though, not way off into the future where they could hit profitability. The interest in another round of funding would probably be low for a company that has chewed through a sizable chunk of funding and so far not produced the results they were hoping for.
  - ivankirigin 17y ago
    We didn't want to do Tipjoy as a side project. Like I mentioned in other threads, payments isn't something to do lightly. Any contracting that would pay the bills wouldn't leave enough time to work on Tipjoy.
    - eterno 17y ago
      I didnt really mean it as a side project. I understand it won't work that way. Just keep it on the side till you are able to raise more funds, or organize from other sources (job,consulting etc.) to give you a decent runway.
patio11 17y ago
Is the problem that very few of your visitors convert to tippers? Assume, for the sake of argument, that the highest number on that graph is accurate and sustainable. Even if it were, it is well below the level the business needs, because you need truly massive scale to make a living solely on transaction costs. 350k visitors * 1% conversion (+) * < $1 in transaction fees = < $3,500 in gross revenue. Now, deduct the cut of the CC interchange fees. Uh oh. + Where a conversion actually means cash money exchanged hands. I remember there being some notion of promises/pledges which could be swapped around without actually generating an exchange of cash money. Promises are lovely things but they demonstrate interest a lot less readily than observable flows of cash money (since they're cheap and ephemeral, presumably why the system was instituted) and it is difficult to spend your 1% cut of the value of a promise.
- zhyder 17y ago
  Agreed. I was just hoping to get actual info on: - Conversions from 'visitors' to pledgers - Conversions from pledgers to payers - Avg monthly payment (volume of tips) per payer (Btw, doesn't Compete often underestimate by a factor of 2 or so?)
- ivankirigin 17y ago
  We took 3% on top of any fees. The business model is pretty easy. If you need $N K per month, you need N/0.03 monthly transaction volume to break even. I wish we had more time to make things like http://tatatweet.com http://tatatweet.com, but better. We'd take 100% of the transaction volume, and help the twitter app market grow. I'll certainly build things in my spare time for that market.

by zhyder 17y ago

ivankirigin 17y ago

Compete measures iframe includes or javascript widgets - meaning our widgets on 3rd party sites. That traffic is roughly correct in direction, but totally wrong for the volume to tipjoy.com itself. But that doesn't really matter, because it is a service - one usable almost entirely without visiting tipjoy.com. The twitter integration, for example, is completely unmeasured by compete. Finally, traffic is a poor metric for a payments site. Transaction volume is what matters. Ohh, and I'm not being that open. If we were profitable, we wouldn't be shutting down.

patio11 17y ago
Transaction volume is what matters Feel free to smack me if I'm prying, but I'd be fascinated to know a rough ballpark for what transaction volume was.
eterno 17y ago
Thanks for being so open and honest about the whole thing. You said, if you were profitable, you wouldn't be shutting down. But if you think there should be a way to make social payments work then don't you think its just a matter of time when you would be profitable. I mean minimum profitability also doesn't really justify what is called in other posts the 'opportunity cost', but if you are working on something big and still believe there is customer value then profitability will come eventually. And if that belief is still there then maybe just buckle down for sometime in a paying gig and then go back again. It might take your mind of it for sometime which might actually give you some good insights on how to take it ahead. I though, still understand that there could be other personal reasons for you to do this, in which case please feel free to not respond. Thanks again for the post and best of luck for the future.
- robryan 17y ago
  If sounds like they would need new funds now though, not way off into the future where they could hit profitability. The interest in another round of funding would probably be low for a company that has chewed through a sizable chunk of funding and so far not produced the results they were hoping for.
- ivankirigin 17y ago
  We didn't want to do Tipjoy as a side project. Like I mentioned in other threads, payments isn't something to do lightly. Any contracting that would pay the bills wouldn't leave enough time to work on Tipjoy.
  - eterno 17y ago
    I didnt really mean it as a side project. I understand it won't work that way. Just keep it on the side till you are able to raise more funds, or organize from other sources (job,consulting etc.) to give you a decent runway.

patio11 17y ago

Is the problem that very few of your visitors convert to tippers? Assume, for the sake of argument, that the highest number on that graph is accurate and sustainable. Even if it were, it is well below the level the business needs, because you need truly massive scale to make a living solely on transaction costs. 350k visitors * 1% conversion (+) * < $1 in transaction fees = < $3,500 in gross revenue. Now, deduct the cut of the CC interchange fees. Uh oh. + Where a conversion actually means cash money exchanged hands. I remember there being some notion of promises/pledges which could be swapped around without actually generating an exchange of cash money. Promises are lovely things but they demonstrate interest a lot less readily than observable flows of cash money (since they're cheap and ephemeral, presumably why the system was instituted) and it is difficult to spend your 1% cut of the value of a promise.

zhyder 17y ago
Agreed. I was just hoping to get actual info on: - Conversions from 'visitors' to pledgers - Conversions from pledgers to payers - Avg monthly payment (volume of tips) per payer (Btw, doesn't Compete often underestimate by a factor of 2 or so?)
ivankirigin 17y ago
We took 3% on top of any fees. The business model is pretty easy. If you need $N K per month, you need N/0.03 monthly transaction volume to break even. I wish we had more time to make things like http://tatatweet.com http://tatatweet.com, but better. We'd take 100% of the transaction volume, and help the twitter app market grow. I'll certainly build things in my spare time for that market.