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How to make money from social media


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Business Spotlight - epaper ⋅ Ausgabe 7/2022 vom 29.06.2022

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Artikelbild für den Artikel "How to make money from social media" aus der Ausgabe 7/2022 von Business Spotlight. Dieses epaper sofort kaufen oder online lesen mit der Zeitschriften-Flatrate United Kiosk NEWS.

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LYONEL DOUGÉ

Known as: founder of TipSnaps Social media: with about 450,000 users, TipSnaps allows social media creators to earn more money from their content Social justice: Dougé wants to address inequality in social media by helping creators from racial minorities to monetize their content. TipSnaps has already paid out $2.5 million to thousands of creators

MEDIUM US AUDIO

Today, the creator economy is worth around $100 billion (€93 billion). But before it even existed, TipSnaps founder Lyonel Dougé recognized its potential. The 38-year-old was looking through social media in 2016 when he realized that creators could make a lot of money if they were paid directly by fans for exclusive content. Using his knowledge and experience as a computer engineer for big companies like Sony Music, Viacom and Johnson & Johnson (J&J), Dougé started TipSnaps — asubscription platform that now has ...

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... about 450,000 users and has paid out over $2.5 million to more than 60,000 creators.

Dougé himself has described his vision as a version of Instagram with a paywall. He had to balance a full-time job with coding nights and weekends at his home in West Orange, New Jersey, before the site went online in March 2017. On the platform, users are called “tippers” and pay their favorite social media creators, called “makers,” for exclusive content that’s not available anywhere else. The makers are often creators of color and pay 15 percent of their earnings to TipSnaps.

Despite the success he’s already had with TipSnaps, Dougé is still working full-time and runs his platform with a very small staff: a co-founder he brought on in 2017, one full-time support worker and a part-time engineer. Although similar start-ups have raised millions in venture capital, TipSnaps has so far raised only a small pre-seed round of $200,000 and is now hoping that crowdfunding through the start-up investing platform Republic will raise around $750,000.

“Everyday people can monetize their fan bases”

START-UP VOCABULARY

Here are some important terms in the start-up scene.

Bootstrap: to create a successful start-up with minimal financial resources CPM (cost per mille) : a payment model for online advertising based on the cost per thousand impressions.

This is different to pay-forperformance models, which are based on user reactions, such as the click-through rate Crowdfund: to raise many small amounts of money from a large number of people, usually via the internet. Crowdfunding allows

TipSnaps users, for example, to fund new ideas for content that they want to see in the future Seed capital (or seed money): money that is used to start a new project or business Shadow-ban: to block a user from a platform or forum without their knowledge, usually by making their posts/ comments no longer visible to other users Venture capital: money invested in a high-risk project, typically a new business

Tell us about starting TipSnaps.

There are everyday people going from 100 to 5,000 to 50,000 to 100,000 to a million followers over several months, which is kind of overnight. My vision was that these everyday people — whether it’s a fitness trainer, a bartender, a musician, whatever — they can monetize their fan bases, from their 100,000 followers. Even if half a percent of 100,000 say: “I’ll pay you five dollars a month to see exclusive content that you don’t post to Instagram.”

I knew it would be huge. I started messaging people, saying:

“Hey, you have, like, a million followers and you have no link in your bio.” Back then, that wasn’t a thing. “You’re not promoting a product. You’re not selling.” Not every influencer is business-savvy enough to talk to a company like Target or Disney and get a deal. That’s how we were able to bootstrap from zero to almost half a million users.

How is TipSnaps different from other platforms?

We have kind of a two-pronged value. The first is for creators of color. When you look at just the tech ecosystem generally, whether it’s founders, stakeholders, shareholders, there’s very little representation of people of color. The creators driving culture, especially in the U.S., a lot of the time, it’s creators of color.

And so our value prop is we’re not trying to replace Instagram, we can’t replace TikTok, but what we can say is that you won’t get shadow-banned here. We’re going to uplift you and we’re going to offer you a competitive rate. We want to make sure that everybody has a home. Our motto is: “Everybody’s a creator.”

We also have a functional thing that’s completely different from anybody so far, and it’s crowdfunding for content. That’s built within TipSnaps now — it’s called Tip Pools. It’s GoFund-Me but for social media content.

Why do people pay for social media content when so much of it is for free?

It comes down to superfans. We think 0.5 to one percent of your fans would subscribe to you at least once. Then, depending on how good you are (meaning how often you post, the quality of your content), you should get a 60 to 70 percent resubscription rate — if you do what we say, which is post multiple times a week and make sure your content is longer on your premium platform than on your free platform.

The idea is, if you do hair tutorials on YouTube and upload one tutorial a week, upload a 60-second teaser on YouTube, or maybe two minutes, but then upload the ten-minute video on TipSnaps, behind your paywall. There are many people who would pay for that because they love these creators. That’s why these creators have millions of followers, or hundreds of thousands, or tens of thousands.

When can a creator begin to monetize?

If you have 500 followers, if you have 500,000 followers, you can monetize — again, one percent of your fans. So, if five people pay you $20 a month, that’s better than nothing. How do you monetize? You just go on a platform like ours. They’re all free to start. We take our percentage once you generate money.

On free platforms like YouTube, the CPMs [cost per mille] are really low, but on a platform like TipSnaps, you can make seven to ten times as much.

In 2018, TipSnaps had 100,000 registered users and $600,000 in revenue. You had gone to 40 venture capitalists (VCs) asking for support, but you say they all said no because of your skin color. Why do you say this?

I have documented who I spoke with and I have email threads where I’m trying to convince them that this is a real thing and that this is going to explode, just to be told: “Let us know how you do.” And then the pandemic happens and OnlyFans happens, and everybody’s like: “Oh, shoot, you can charge people on social media for content. We need to build this out.” And now you’re seeing start-ups get funding of two, three or four million dollars, but with no users, no platform.

It’s not because it was a new idea?

No. They don’t trust my expertise. They look at me, and it’s like: “You don’t look like me.” I had a person tell me that he’s talked to VCs who are like: “I invest in people who look like or remind me of Mark Zuckerberg.” Women and people of color experience this. So, absolutely, I don’t fit. There’s a reason I spoke to 40 VCs.

They’re interested, but that’s not enough. And I do think if I were a white male, I would have raised a lot of money already.

Now, big platforms like YouTube offer premium services with which creators can monetize. Is this a threat to TipSnaps?

It’d be lying to say that it’s no threat. But when TV started, there were maybe five channels, and now there are thousands. And I think the creator economy needs niche platforms, and we already have our niche and we think we’re leading in it. And even if we only had 2,000 users, I still think it’s important that TipSnaps and platforms like it exist.

How important is it for a platform to have its own language?

It’s important because it differentiates you. It’s like: “I’m a ‘maker’ on this platform.” Everybody else is saying “fan.” We say “tipper.” You want to have some commonality with the industry, but I think it adds value to the user experience.

Do you still use social media for fun?

Every day. That’s the only way you can stay on top of where the industry is going.

“It’s important for a platform to have its own language”

CLOSER LOOK

HOW DO YOU LIKE IT?

The word like can appear in many forms. In our interview, Lyonel Dougé uses it several times as an adverb, which is common in informal spoken English. It’s a way of expressing a person’s attitude or feelings as a form of direct speech without necessarily being a quotation. Consider the following example.

Standard: At Beth’s party, a woman walked up to me and told me that she had met me before.

Informal: At Beth’s party, this woman walks up to me and she’s like: “I know you from somewhere.”