Social Cord Blog

On Friday it was announced that Tipjoy, a Social Cord competitor decided to close operations. While it is sad to see a company pioneering commerce in Social Networks close, I am not sad to see a competitor leave the space.

In their blog the Tipjoy team writes:

“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 believe that there is a large opportunity for offering premium content within these new environments. And while we have neither had conversations with the team and our assumptions could be wrong, Social Cord has received an amazing response by publishers both small and large interested in offering premium content.

The following are a few reasons why we believe Tipjoy failed:

Too Broad

They could have been too broad. Tipjoy seemed like it was very extensible, and it could be used for many purposes. This quality can be a benefit or a hindrance. In the case where you launch a completely new product it is very important that you handhold your first customers. Almost act as if they have no imagination by giving them very specific uses for your product. At my estimation Tipjoy did not do a great job with this as there were two posts on between February 2009 and now about how one could use the tipjoy platform. They also launched a contest to get developers to use the platform, and potentially come up with great use cases for the product, but none of the results were ever announced. We can only assume that there were no great uses.

Too early

An old mentor of mine once said to me “The dangerous thing about being a pioneer is that you can end up with arriows in your back.” I can’t help but think that launching in early 2008 was too early  for a product like this. When Tipjoy launched Twitter was not yet mainstream and until recently no one was talking about premium content in Twitter or elsewhere on the web. I can see how they would have achieved very little traction over the last year and a half. This market variables were not yet in place.

Twitter as the only platform

A payments service solely based on Twitter is a difficult proposition. This is why we’ve bet on delivering content to other social networks and mobile platforms as well. Twitter in most cases is not the only outlet that a content creator is using. Offering a payment platform specifically for Twitter is very limiting for a publisher, because the audience was too small at the time and is likely still too small.

Tipjoy was really a pledge platform not a payment platform

Tipjoy did not actually handle the billing immediately. Tipjoy allowed the recipient to place a button on their page that would simply allow a tipper to only say how much they wanted to tip. The tipper would later receive an email saying they should pay for the tip. At the time that the user has to pay the bill the emotion of wanting to leave a tip is gone, so I would imagine the conversion percentage of tippers to payers would be fairly low.

Overall it seems that the Tipjoy team had parts of the equation right – and there are many reasons why businesses fail,  but unfortunately everything did not line up for them.  We think our visions of being multiplatform, focused on content creators, and having a frictionless two step payment process will make the difference in helping content creators get paid for what they do in these new channels.

-David