Chad Whitacre is the founder of Gittip, a platform that makes it easy to send and receive small gifts of money with no strings attached. But it’s actually much more than that.
”Gittip is a system for funding people who build free culture. The core is small weekly gifts. The idea is that if 1,000 people give $1 a week to a great programmer, musician, scientist, teacher, etc., then that frees them up to pursue their vision even further for making the world better.”
Hey Chad - so please tell me about Gittip: where the idea came from, and what you’re hoping to accomplish with it.
I started Gittip in the summer of 2012 after chasing the startup dream for a decade and landing in a stiflingly perfect corporate job. I’d been toeing the entrepreneurial waters all spring, and I basically said fuck it, I’m not waiting to hit a capitalist home run anymore. I don’t want to own a business, anyway. I don’t want to tell you what to do any more than I want you to tell me what to do. I want as many of us as possible to be able to pursue our own vision of how to create value in the world, on our own terms.
I’m not lazy. But I’m also not motivated by the “American Dream”. I’d check out and be Amish if my wife would. Short of that, Gittip is my attempt to build a life based on generosity and gratitude, rather than overt striving or quiet desperation, for myself and as many others as want it.
I don’t need to tell you that crowd-funding is very trendy these days and comes in various flavors. How is Gittip unique?
Gittip is funded on Gittip. That’s the fundamental difference. TipTheWeb is the only other site I’ve found that’s funded on the same platform it makes available to others. But they’re aimed at content, as is Flattr. Gittip is primarily about people.
Kickstarter (and clones) are about projects, and are part commercial transaction and part patronage. This is an interesting tension, and Kickstarter is leaning into it. Gittip is pure patronage. Gifts are small and anonymous and have no strings attached on either side.
Kickstarter is also designed around short, urgent campaigns, whereas Gittip is designed for long-term, steady, sustainable funding. You should be able to depend on Gittip to pay your mortgage.
Kickstarter does a pretty good job with transparency, better than Flattr, for example. On Gittip I’m trying to maximize transparency. It works with real currency and clearly shows you data for both patrons and receivers. Gittip’s source code and decision-making are all open and transparent as well.
So Gittip enables transactions, but unlike other crowd-funding companies, you’re not making money in the process. You pass through 100% of the tip to the recipient, and charge the tipper the cost of processing their credit card.
Right, so, other platforms like Kickstarter and IndieGogo and Flattr have done a lot to break the ice on crowd-funding, but they’re still traditional businesses that take their pound of flesh. Etsy is the least onerous: sellers keep 96.5% (Ed. note: minus listing, promotion, and card processing fees). By the time Kickstarter and Amazon Payments are done, projects are looking at 90-92%. Flattr passes through 90%. I saw today where Vimeo has added a tipjar where content creators only see 85%, and not for 30 days.
What happens is that you end up with two classes of citizens: the people trying to make money on these platforms, and then the owners that profit off of them. By funding Gittip on Gittip I’m not only aligning my interests with my users’, I’m becoming a full-fledged user myself. There’s no distinction.
The bottom line is that I haven’t found another way to fund Gittip that feels true to the ethos of the site.
What are the biggest opportunities and/or challenges you foresee for Gittip?
Gittip will be born when the first person announces that they’re depending on it for their livelihood. Getting there is the challenge. We moved $1,260 yesterday and have been growing at about 4% per week. The top receivers are seeing between $100 and $200 per week. It’s the chicken and egg problem of building a system based on network effects: where does the next order of magnitude come from?
In terms of opportunity I feel like we’re just at the beginning of what Gittip can be for the open source community. That’s where it’s gotten the most traction to date and I believe there’s a lot more to come. I’m reaching out to artists and musicians and coffee shops and whatnot to find other niches where Gittip can work for people. I think Gittip could be a useful tool for anyone with a user/fan/customer base building free culture, and that’s how I’m trying to focus it. We’ve got 169 open issues in GitHub right now so there’s plenty of open road.
You’re calling Gittip the first Open Company. What does that mean?
The short answer is, I maximize transparency, don’t compensate employees, and charge as little as possible. The longer answer is here.
Basically, I’m exploring how porous a company can be. Investors these days are looking for companies that include their customers in the chain of value creation. So, Twitter users filling Twitter with tweets, sellers filling Etsy with products, creators filling Kickstarter with projects, that kind of thing. I’m dialing it to 11 and saying, the only difference between an employee and the outside world is that the employee knows the database password. That’s it. The corporate shell becomes almost vaporous, and the community is the thing that actually exists, building something for itself.
So far it’s working great. There’s lots of participation on GitHub and on Twitter, and even our vendors are open partners.
Can you point to awesome people or projects that are, or you think should, be supported via Gittip?
I listen to a lot of music on YouTube, and it feels so right to be able to turn around and pledge gifts to my favorite artists, e.g.: Red Hot ChiliPeppers, Andrew WK, Armin van Buuren. That makes me feel like I’m in the future.
I also loved Dan Harmon’s keynote at the XOXO festival, about keeping money from ruining the Internet like it’s ruined TV. The project he’s currently part of was funded on Kickstarter. I would love it if Gittip could work for him and his colleagues.
On a more serious note, Lisa Kristine is doing fantastic work photo-documenting global slavery.
Thanks Chad, keep up the good work!