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Stuart Garfield
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Even the next Facebook has to start somewhere. Two new Boston-area startups are banking that “somewhere” will be a niche — preferably as well-defined as possible.
Arlington-based Tipjoy’s micropayment technology has the potential to change the way content is published and paid for all over the web, believes co-founder Ivan Kirigin, but for now the company is focused on providing “online tip jars” on blogs, and taking a cut of the cash. Meanwhile, Boston-based The Compare Corp.’s CampusCompare.com looks to build an audience among high school students picking a college.
“Even Google started out as a niche product” — providing a back-end search capability for other websites, said Y Combinator partner Paul Graham, a Tipjoy investor. “If you establish a user base, what that means is you have discovered a bunch of people with needs that haven’t been satisfied. That’s like discovering a vein of gold.”
Tipjoy, which is like a Digg or a Reddit with a monetary twist, hopes its bloggy vein will bring it enough users to attract major content publishers like the New York Times Co. (NYSE: NYT), and become a service that gets widely deployed across the web, Graham said. Tipjoy enables users to identify and share content they enjoy with a one-click micropayment that doesn’t take users offsite. For now, its niche is connecting bloggers who’d like to quit their day jobs with readers willing to voluntarily pay for their favorite content, Graham said. Eventually the company hopes to turn a profit taking a small share of a large number of transactions.
The Compare Corp.’s business model is centered more around advertising and demographics. It hopes to build a loyal user base among college-hunting teenagers by providing an online platform for organizing a college search — including data, student reviews, opportunities to network and chat, and a calculator that tallies a student’s chances based on an academic, athletic and social profile.
“We want to be an unbiased source. Kids are getting pressure from their parents, they’re getting pressure from their counselors,” said Maxine Grossman, vice president of business development. The company hopes to make money by eventually adding targeted advertising to its site, said Grossman.
But CampusCompare and sites like it may have a hard time enticing students away from the services their friends are already using, said Ryan Alderman, vice president at the online media company Razorfish. “People are already having this exact dialogue on a site with a much more active and much bigger network,” he said.
Tipjoy likewise faces established competition among sharing services — but if it succeeds, the company has potential to become like Facebook or Twitter, creating a new way to determine what data are useful toward establishing relevance for users and advertisers, said Kirigin, a former iRobot Corp. employee, who founded the company last January with his wife, Abby Kirigin, a former Nokia Corp. employee.
Tipjoy launched on a $15,000 investment by California-based Y Combinator, which has offices in Cambridge. New York-based Betaworks joined in the company’s most recent round, Kirigin said, which netted the startup $380,000, according to a regulatory filing.
CampusCompare launched in August, co-founded by CEO Eric Melka, a former executive at Corporate Software and Technologies. Grossman declined to disclose The Compare Corp.’s funding amount and did not name its investors.
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