As traditional media sources decline in influence, content creation on social media platforms is taking off. Instagram announced that it reaches 1 billion monthly users in June 2018, and continues to grow rapidly alongside Twitter, YouTube, and Snapchat. A full third, 35%, of American adults say that they use Instagram. 

Despite the flood of users and content on social media sites like Instagram, Twitter, YouTube, and Snapchat, those platforms have not built in-app methods for influencers to monetize their popularity. The primary method for monetizing a social media following is via brand sponsorships, but seeking and maintaining those contract relationships requires high effort on the part of influencers themselves. 

While companies like Patreon offer monetization services for content creators, they are desktop-based and targeted at true creatives that devote significant portions of time to creative works such as novellas and podcasts; other advice for monetizing Instagram audiences recommends creating entirely separate sites or channels, nearly a full-time job. more casual content creators posting fitness advice, modeling portfolios, and lifestyle tips from their phones are left wondering if their huge follower bases can create any tangible capital value. 

In sum, a huge quantity of influencers wait on Instagram, Twitter, YouTube, and Snapchat, drawing thousands of eyes to their content each day without any way to capitalize on that popularity. 

TipSnaps is a digital content monetization platform for social media influencers, designed to offer a low-effort method for influencers to gain an income from their large follower base. TipSnaps currently allows influencers to earn money via two avenues: subscriptions and tipping. Influencers can invite their fans to subscribe for exclusive content not released to non-paying followers, while tipping allows fans to contribute a one-time payment in appreciation of an influencer’s content. 

30.4 percent of Instagram users have more than 1,000 followers, and 14.7 percent have more than 10K followers: that’s almost 120M Instagram users with more than 10K followers, a huge market of influencers with loyal followings. TipSnaps argues that many of those influencers don’t actually realize that they are “influencers,” and don’t realize that they have the ability to monetize their social media popularity. 

The TipSnaps platform is mobile-first and targeted at lower-tech influencers who aren’t creating content professionally from a desktop computer – they’re simply documenting their lives or expertise on their phone and sharing on social media. TipSnaps simply offers these casual “Makers” a TipSnaps profile, which they can link in their social media bio, a low-lift step for the Makers with high upside (revenue) potential from loyal fans. 

TipSnaps benefits from a network effect by which TipSnap “Tippers” create a TipSnaps profile to contribute to one of their favorite influencers, but thereby discover additional Makers/influencers and make additional contributions. Through straightforward Maker recruitment via Instagram direct message, TipSnaps has already built a network of over 279,000 Tippers. They’ve achieved 23.7% compound monthly user growth since their launch in 2017. 

While TipSnaps intends to grow via more intensive growth marketing to acquire Makers (moving to a more sophisticated approach beyond their current method of Instagram direct messaging), they also intend to open an additional monetization route for Makers. TipSnaps will open a brand partnerships pathway for Makers to partner directly with brands looking for influencers in specific verticals to promote their products on social media. TipSnaps has already secured agreements with several brand partners, and anticipates launching this new offering to Makers in Q4 2019. Brand partnerships are especially promising given that two-thirds of marketers planned to increase their influencer marketing budget in 2019. 

Beyond subscriptions, tips, and brand partnerships, TipSnaps also intends to become a content hub for influencer monetization, specializing in educating low-tech influencers on earnings maximization. While the core of TipSnap’s business will always be fees collected from influencer content monetization, their own influencer-targeted content efforts may provide a brand-building opportunity and generate marginal supplemental revenue. 

• Tailwinds of Media and Content Disruption: The landscape of media and content consumption is changing rapidly, as the Internet and social media continue to democratize the ability to create and consumers turn away from old-school media properties like TV and newspaper. Instagram has 1 billion users, and over 500 million use the platform daily; Instagram is a content hub, with users consuming information ranging from simple lifestyle posts to full online courses and thought leadership. While many users appreciate social media content because it is free and easy to access, many are willing to contribute nominal amounts of money to their favorite influencers; these nominal contributions at scale amount to huge revenue potential for TipSnaps.
  

• Market Size of Influencers: There are over 100 million influencers (those with 10K or more followers) on Instagram alone, not counting “micro-influencers” with less than 10K followers or influencers on other social media platforms including Twitter or Snapchat. The potential audience for TipSnaps is huge, and TipSnaps is marketing an attractive proposition for these influencers: spend a short amount of time setting up a TipSnaps profile, include the link in your bio, and make money. TipSnaps has an immense opportunity to increase their Maker network, and therefore their revenue, rapidly.
• Early Traction: Since TipSnaps’ launch in May of 2017, the company has generated over $1.2M of gross revenue to Makers from a network of over 279,000 Tippers. In 2019, TipSnaps projects to generate $2.3M of gross revenue to Makers, netting themselves around $240K. In addition, the company is fully bootstrapped (has taken no outside capital), and has demonstrated profitability though nominal. 

TipSnaps was founded, bootstrapped, and built by a single founder, Lyonel Douge. Lyonel earned a degree in computer engineering before pivoting from full-stack developer to product manager for leading consumer brands. He led Sony Music’s first digital asset promotional distribution system, and delivered Viacom’s first cross-platform analytics and reporting tool. 

Lyonel currently works at Johnson & Johnson as the Co-Product Owner of the company’s consumer website platform, which hosts over 500 sites for Johnson & Johnson’s consumer brands. Lyonel previously founded and developed StandApp, a health and fitness app, which garnered over 50,000 downloads. He developed the MVP of TipSnaps while engaged in his full-time work for Johnson & Johnson. This is a concern since he has not fully committed to the business and should be weighted accordingly but other notable founders including some founding members of Uber did not fully quit their jobs until more serious funding was acquired so it does not mean that the company cannot be successful. 

The remainder of the TipSnaps team consists of contractors. A portion of TipSnaps’ raise on SeedInvest will enable Lyonel to work full-time as TipSnaps’ CEO and hire additional full-time employees. 

TipSnaps is a Deal to Watch because it is capitalizing on the meteoric rise of social media users and the sizeable pool of users who qualify as “influencers” with thousands of followers. As hundreds of millions worldwide access Instagram and other social media networks on a daily basis and interact with a huge pool of social media influencers, there is large potential to scale a simple tool for influencers to engage their followers to subscribe for exclusive content or tip for engaging content. 

Notably, TipSnaps is monetizing the long tail of influencers who don’t have quite enough followers to be noticed by major brands focusing on influencer marketing. They offer a direct link between these influencers and their fans, cutting out the middle-man marketplace between more prominent influencers and major brands.

It is worth mentioning, however, that influencer marketing has faced recent criticism. Some marketing leaders believe that influencer marketing doesn’t target an effective audience, hinders building an authentic connection with customers, and is ripe for fraud. These risks threaten the growth potential of TipSnaps’ expansion into brand marketing.  

While TipSnaps is led by a single founder who is currently not working full-time, the company has demonstrated traction and profitability in their two years since launch. The numbers alone are compelling: over 279,000 Tippers have contributed over $1.2M to influencers, powered by limited marketing and old-fashioned cold outreach to influencers. 

Other influencer tools have enjoyed favorable exits to large media conglomerates, and influencer tools also have the potential to be acquired by large marketing agencies; while unlikely, it’s theoretically possible that giants like Instagram or YouTube would acquire TipSnaps to further monetization for creators on their platforms. With a capital investment to build a full-time team and launch a new brand partnerships vertical, TipSnaps will be well-positioned to capture significant value.