Friday, September 26, 2008

Tipjoy: "now you can!" (sell digital content)

We've found ourselves having to explain the differences between PayPal and Tipjoy several times in the last few days. Obviously we need to be clearer. How's this:

...lets you keep more of your earnings for yourself. We aggregate
payments and take a small fee, and so you get to keep a lot more of
your money when you sell through Tipjoy than if you sell through
...provides a much better experience for your customers. Buying with
Tipjoy is one click and doesn't take your customers away from your
page, unlike PayPal's 9+ click process which takes your users away
from your site.
...encourages your customers to share your content with their
friends, through feeds to social networks like Twitter and FriendFeed,
RSS feeds, and emails.

Here are some more details on PayPal's fee structure vs. Tipjoy's:
PayPal takes 2.9% of your earnings, plus $0.30.

The reason PayPal is structured like this is that it is designed for
selling very expensive goods, like cars, jewelery, and vintage toys.
If you want to sell a $500 necklace, you get to keep $485.20, or 97%
of your earnings. That's great!

But you can't charge $500 for MP3s, blog posts, and virtual roses.
Probably you're going to charge some amount between 1 and 99 cents.
And for that, PayPal really doesn't meet your needs. For example, if
you earn $2 with PayPal, you have to pay them $.36. You only get to
keep $1.64. That's only 82% of your total earnings.

Tipjoy is designed to sell virtual goods. Goods which cost how ever
little (or much) you want.

At Tipjoy, we do payment aggregation. Which basically just means that
people say they're going to buy a bunch of stuff from all sorts of
different merchants, and then they pay for it all at once, in a single
transaction. By grouping the payments together, the fees are divided
across a much larger amount of money, and each merchant's individual
fees get much smaller. So much smaller, that even with our 3%
commission, you still keep more of your money with Tipjoy than with
PayPal. The larger people's bill is when they pay it, the smaller
your fees are. Currently, the typical Tipjoy bill amount is $5. This
means that when you take $2 out of your Tipjoy account, you can expect
to actually keep 86.5% of it, or $1.73. And it only gets better from
there: as people buy more with Tipjoy, and their bills get closer to
$10, you'll get to keep 89.5% of your $2. When they're closer to $20,
you'll get to keep 91.4%.

Make great content and sell it for cheap. Make it easy for your
customers to buy. Make it fun and social. With Tipjoy, now you can.

Wednesday, September 24, 2008

Announcing Series A financing lead by Betaworks

We are delighted to announce that Tipjoy has closed a Series A round of financing led by Betaworks. Betaworks is a seed stage platform for investing in and building Internet based businesses. Its network includes Tumblr, Twitter (Summize), and others.

Others in the round make for a stellar group of investors and advisers with The Accelerator Group, David Shen Ventures, Chris Sacca, Taavet Hinrikus, and Ron Bouganim.

We're more than just the easiest way to leave tips for great online content. We make it easy to buy and sell any digital content. As an example, we've made a PDF version of this announcement available for 99¢. A single click grants access to this document. New users need only enter their email address. Tipjoy transactions are decoupled from the payment processing, making the user experience super-simple. Here is our announcement widget.

Simplicity in digital payments is a primary value of Tipjoy. We understand the difference between selling physical goods and digital goods. The old-fashioned systems currently out there were designed so that people could sell physical goods from their brick-and-mortar stores over the internet. Digital goods are fundamentally different.

We know that this document isn't really worth 99¢. But bits are bits, and there are a lot of bits out there that you would pay 99¢ for. Comics which made you laugh, amazing videos, MP3s of great local bands, genuinely useful web apps. Tipjoy makes giving money for any digital content just a single click.

Tipjoy understands that when you give money to something you love online, you're doing it as a social gesture. We encourage you to share great content, see who the patrons are, be the top giver, and tweet about it. Here's the Tipjoy link for this announcement

Tipjoy is also announcing that we're allowing cash-out via PayPal. As always, you can also choose to buy yourself an Amazon gift card or dedicating your earnings to another site or to charity. We look forward to continuing to make it easier for you to get your money in and out of Tipjoy by leveraging additional payment processors in the future.

All proceeds from the sale of this PDF will be donated to the storm relief fund Yéle Haiti.