February 14, 2014
Micro-payments is a very interesting segment given the amazing growth of digital content and digital media like news, music, videos, etc. (small ticket size). Add to that the Exponential growth of Mobile app industry (priced at $0.99, $1.99 and so on). The segment is also driven by the growth of social networks and online gaming communities (small amount credits, perks, virtual currency, etc.). Tinypass makes this eCommerce functionality available to web and mobile sites of all sizes.
So we interviewed Trevor Kaufman, the Founder and CEO of Tinypass, to learn his take on the industry and find out more about his company. We went to their office in downtown New York and found it amazingly full of energy, with a young team and that startup enthusiasm that you expect to find in New York’s Silicon Alley.
Q. Whats your story Trevor, and how did you start this firm?
Ans: I worked in the advertising and media industry prior to Tinypass. I had started a digital agency called Schematic in Los Angeles. We primarily developed media applications for companies like Intel, Nokia, NBC, and Microsoft, but also did a fair amount of digital marketing for large clients like Target. I sold the business to WPP in 2007 when we were about 400 people, and worked at WPP for several years, most recently as the CEO of their global digital network, Possible Worldwide.
I saw a clear trend towards digital, and that an increasing amount of traffic was beginning to come from mobile. It struck me that while payment gateways existed, sites with content didn’t have the tools that eCommerce sites had to easily segment their audience, present particular offers, or optimize based on data. So we started working on the business rules that will help big and small publishers maximize their revenue. The first step was to create a New York Times-style paywall product, where they can give a certain number of free previews before asking users to pay.
Q. What has been your run rate and what are your growth plans for the future?
Ans: In Dec 2012 we had 10 publishers. It took us until June 2013 to get to 20 publishers and 50,000 pages with one or more type of paywalls from Tinypass. In Jan 2014 (last month) we had 250 publishers with a million pages with subscription offers being shown by our publishers. We’ve now been growing at about 25% every month. We’re also growing the team, both here in the US and with a tech team in Russia.
Q. Who are your client?
Ans: Publishers of all sizes use us, from individuals — we got quite a lot of notoriety by helping Andrew Sullivan spin off his blog, The Dish, from The Daily Beast — to big name media companies, such as IPC Media, Hearst, and The National Review.
Q. Any new or exciting things you are doing at Tinypass?
Ans: Yes we will be announcing the inclusion of some new payment methods soon. Of course, Bitcoin is very exciting for us, not only because of how low the fees are for merchants, but because the micropayment capability unlocks new business models for our publishers.
We are also working with some large publishers in strategic engagements for them including integration of their existing subscription systems with Tinypass, and developing highly bespoke business models for them. We anticipate rewarding users based on a host of actions, whether that be paying, watching advertising, socially sharing, or volunteering their data.
Q. How did you decide upon your pricing. Dont you think its on the higher side?
Ans: We actually believe our pricing is quite low. If you compare Tinypass to payment systems alone, then yes, our rates are higher. Most we’re far more than a payment system, we’re a full commerce software suite. Most publishers initially underestimate the complexity of managing user accounts, providing user experiences, gating access to content, integrating with CMS and other third-party systems, and creating actionable reporting. We provide all of that right out of the box. Since our price scales with volume, I think working with us is much cheaper than trying to reinvent the wheel on your own.
Q. Have you raised any money for growth?
Ans: Yes, we recently raised a second seed round of $3 million. That money came from me, a NY-based hedge fund called Cascabel Management, and a seed venture fund called Plough Penny Partners. We’ll look to raise a Series A round this year.
Q. Do you face any challenges in the business. What keeps you awake at night?
Ans: Our challenges are mainly related to growth. We have lot of fresh ideas, we’ve seen a massive opportunity, and so prioritization in our feature development and our partnerships is extremely important for us.
Q. Who are the other key people in the founding team?
Ans: Our two product leads are the creative visionaries of the company. Our head user experience designer, who sets the tone for all our interactions with our clients and their customers, has done a brilliant job. And our head technologist has been fantastic at giving us a foundation we can build on, while still enabling us to be agile and quick to roll out and test new features. Working with them is what makes our experience at Tinypass so much fun.
Tinypass is an e-commerce platform that allows content creators and media owners to monetize their digital content quickly, powerfully and effectively. Simple to deploy and free to set-up, Tinypass brings the functionality of major paywalls and download services to every site on the Internet, with a flexible and lightweight architecture that scales to support operations of any size – from individual bloggers to multi-national publications with millions of readers. Tinypass integrates easily with leading content management systems and its huge variety of pricing, access and subscription options allows content owners to develop customized paid content offerings that fit their audience and support their revenue strategy. Tinypass is online at www.tinypass.com.
Update (17/02/2014): TinyPass has acquired digital content monetization startup, Swishu. Swishu offers paywall solutions for publishers, radio stations and bloggers, plus extras like subscriber database integrations and real-time analytics. The deal enlarges Tinypass’ footprint in the media space, bringing complementary technology and new clients to the Tinypass platform as well as enhancing its ability to provide publishers and site owners with comprehensive revenue solutions. Swishu founder Nathan Goulding will join Tinypass as Vice President of Product Engineering.
The Swishu ethos of making paid content work for both consumers and publishers perfectly matches the Tinypass model, said Tinypass CEO Trevor Kaufman. The company’s subscriber management tools, which allow publishers to seamlessly coordinate their physical subscriptions with their digital offerings are particularly complementary to our existing feature set and will be a strong addition to our industry leading product capabilities. It’s a great acquisition for Tinypass as we continue to provide media owners with powerful, transparent and easy to use monetization solutions.