Tipjoy, a startup that allowed users to easily collect ‘tips’ from their readers and fans in the form of small Paypal transfers, is closing up shop. Earlier this evening Co-founders (and husband/wife team) Ivan and Abigail Kirigin posted a note to the Tipjoy blog announcing the site’s shutdown. Users with an outstanding positive balance will be able to cash out, but the rest of the site has been turned off.
Tipjoy tried to make web tips feasible by lowering the barrier readers would have to clear as much as possible — to leave a tip, users only had to enter their Email address, with no credit card needed. The amount of money left to a site was effectively a pledge to pay up at some point down the line (Tipjoy tallied up your tips so you could pay them all at once). Unfortunately, users often didn’t take the time to tip at all, and those that did usually didn’t actually pay up.
The company launched last year as part of the Y Combinator class of Spring 2008 and while it saw steady improvements, like a new API in May 2008, it was seeing slow uptake. Later developments included an API that allowed users to send payments over Twitter, and a useful premium Twitter app called Tata-tweet. It also attempted to expand beyond tips to become a more generalized payment service. But despite a solid run, Tipjoy was unable to gain significant traction.
From the site’s blog (be sure to read their post if you have an outstanding balance):
We have decided against continuing to pursue additional funding. After a long and hard look at the market and the situation, we didn’t feel it made sense.
When we evaluate why there’s been so much hype about payments on Twitter, and yet so little traction for us (and even far less for our competitors) it is clear to us that the reason is that a 3rd party payment service doesn’t add enough value. We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party. “Simple, social payments” is *the* philosophy needed to do digital payments right, but once a service groks that, they need only to implement it on their own. We’ve been the thought leaders in this space, we see the hype and excitement, and yet we know very intimately the difficulties in gaining actual traction. The only way to get around this is for the platforms themselves to control payments – then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.
Thank you to everyone who has supported and helped us along the way.
If you have any questions, get in touch: help@tipjoy .com
Ivan & Abby – Team Tipjoy
Tipjoy has been added to the Deadpool.