Tips for ChangeTip

My post about the tipping craze got the predictable reaction from ChangeTip: a writeup at CoinDesk on how the CEO really means well for all of us. Let's use this as an opportunity to constructively discuss the responsibilities of micropayment companies in general, and ChangeTip in particular.

Root Problem For there are many indications that ChangeTip just doesn't get why the way it conducts its business might raise eyebrows. The very first sentence from the ChangeTip CEO is quite telling: "I feel like we're a charity getting yelled at." What's wrong with this? Well: ChangeTip is no charity. At the very root of almost every one of their problems lies the fact that they are a for-profit corporation, engaged in profit-seeking behaviors at the expense of a wider community. It's great to hear that CEO Sullivan has a strong commitment to user privacy. His substantial track record in this regard is something that anyone should be proud of. But if we've learned anything from corporate America, it's that the profit motive has a way of trumping personal values. If a company misses its earnings forecasts, if user growth stalls, if the board realizes that the current revenue model cannot yield the types of returns they seek, it will have no scruples about a pivot. A company's commitment to motherhood, apple pie and emphatic-sounding buzzwords that appease the user community this year is as replaceable as its CEO.

Moving Forward Instead of going over my previous post and extracting a "tl;dr", let me outline what a positive path might look like from here: ChangeTip should outline a response that goes beyond "but we're good people and can do no wrong." Mark Karpeles, Danny Brewster and Alex|Ryan Kennedy|Green were all good people once. Everyone who violates social norms has some story that starts out with them being good people. The ChangeTip ToS needs to be so good that it stands on its own, without reference to the personal history of the company officers. Having made strong guarantees, ChangeTip should protect them by explicitly committing to them in perpetuity. The current ToS says that the terms can be changed at will in the future, with some lip service to user notification. But notification is not equal to informed consent on the Internet, and the latter is often not real consent at all. This is true especially for ChangeTip, because their users rarely interact through their website. ChangeTip should guarantee that users who sever their relationship with ChangeTip will be completely forgotten. If their company values privacy, this should be easy. If they feel no obligation to us the moment they decide they cannot make a dollar off of us, they are just like every other unenlightened corporation. ChangeTip needs to steer its user community away from cringeworthy behavior towards being better people. It should be ChangeTip, not I, who should be publishing tipping etiquette. I googled for "changetip etiquette" and I got a link to ChangeTip features touting how universal their product is, and then my own blog. No tip dusting. ChangeTip needs to get its users to stop kicking around penny shavings. This will help their bottom line, too. No spam. ChangeTip needs to tip privately by default. The very public posts were part of a symbiotic pact with the Bitcoin fringe to spam for Bitcoin. That has to stop. If ChangeTip believes that online tipping is the way of the future, make it live off of tips, not off of underhanded advertising. No guerilla marketing. I am not sure how much money ChangeTip dropped around in various discussion boards, or which specific companies seeded the tips given out by radio DJs and Andreas at the time of the #BitcoinBowl. But this kind of marketing is a social blight. Respect communities. Don't force change and tipping and penny pieces on groups who have not opted in. ChangeTip's blog post smugly told their users to "tip everywhere on the Intarwebs," and now the CEO is confused about why people are upset. Don't try to monetize everything. There are many communities where experts who charge more than $750/hour during their day jobs freely provide help to others. Putting a price on that interaction demeans their effort, invites spammers, and affects the outcomes for all. Educate your users on where not to proselytize. Be a force for good. Provide an easy way to direct tips and action towards worthy causes, like an actual charity. The last point is critical, as it's a litmus test of corporate values. The concerns I raised stem from observing a company encourage sociopathic behavior to further its own agenda. Of course people are going to be worried that a company that violates social norms will do the same to its users by collecting and selling our data. Real change will be marked by a shift from profit-oriented action ("how can we spam a broad audience at any cost?") to community-oriented behavior ("how can we achieve some tangible good for society at large?").

Who Will Win In The Micropayment Space? The bigger question is: is there a future in micropayment channels? Many companies have failed in this space before. The arguments in support of micropayments seem to hit a wall when users face the cognitive cost of making a payment decision. So it's hard to tell which, if any, micropayment company will actually succeed. I won't try to pick winners -- probably all of the current contestants are flawed in some way -- but I will take a guess and name the defining characteristic of the company that will be ultimately successful in this space. The winning micropayment company will be one that has figured out how to convert the Brownian motion of users into cohesive action. ChangeTip does the precise opposite: it takes the collective good will of a large community interested in Bitcoin and squanders that effort into tiny slithers, each of which are too small to do anything but be a nuisance. This achieves the superficial goal of getting the spam out to a broad audience. But it cannot be a sustainable long-term goal. Since it's economically not going to pay off for ChangeTip, there is a legitimate concern that they will have to sell out our data. Worse, it's socially not sustainable for the community to engender $1 of annoyance for every $.001 in tips. And that brings us full circle back to the original criticism. The winning move here is to figure out how to actually extract a sustainable, cohesive action from a group of users whose interests are aligned but whose actions are unorganized. Micropayments are touted as a competitor to ads, but the math just doesn't add up: voluntarily-collected tips fall short of implicitly-collected advertising revenue by three or four orders of magnitude. It's easy to take a chunk of cash from a company and throw it at tweeters during #BitcoinBowl, but it's not going to achieve much. The company that will win in this space is going to be the one that does the opposite: get the casual tippers to actually carry out a demonstrable social good. Fund something that would otherwise not happen. Turn that good feeling into action. Maybe buy the actual $0.10 donut hole and give it to someone who is hungry. Or get a user to listen, really listen, to what someone has to say, where they are coming from, what they're dealing with, at $0 cost. That'll go much farther than $0.003. As a society, we're still struggling to determine the acceptable traditions and customs for online interactions. ChangeTip pushed the scales very far in one extreme direction, for a profit motive where the math did not add up. If they want good will from a broad audience, they will need to demonstrate that they are not just trying to make a buck at the expense of others. I have full faith in their team, and hope to see them prosper by improving the quality of discussion in online communities.

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