Social payments startup TipJoy has headed to the deadpool, as of last night. The company, which allowed users to leave small “tips” to websites that they found interesting or useful, and later built a payment platform for sending payments over Twitter has called it quits. TipJoy, a former YCombinator company that did have a further round of financing past the initial incubator funds raised something close to $1,000,000 before deciding against finding new funding.
It is always sad to see a startup fail, especially one as well known and respected as TipJoy. The two founders, who are husband and wife, Ivan and Abby I assume are headed no where out of the industry. Given their both well polished and respectable resumes it will be short order until they find new homes at other startups. The duo left the following note on the TipJoy blog:
Tipjoy is shutting down.
You can still sign in and cash out funds. We’ve also made it easy to download all your transaction history. But all other functionality on the site is now turned off.
If you have a positive balance, you will soon receive a formal notification describing the shutdown process, which will include a reasonable deadline before which you will need to claim your funds.
If you have any questions about your account, send us email:help@tipjoy.com
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
Thanks,
Ivan & Abby – Team Tipjoy
The direction that any remaining IP or physical assets will take is ambiguous at this point, but will likely be returned to investors in the enterprise. The company is survived by direct competitor TipIt.To who TipJpy claims has little to no traction.
Disclosure: I am the cofounder of Contenture, a startup that does overlap in some ways with TipJoy.
