How often have you heard the phrase, “We can’t pay you, but think about the exposure?” Creatives often hear this when brands want to collaborate without forking out any dough. Unfortunately, you can’t pay your bills or buy groceries with exposure. That’s why sites like Patreon and Only Fans exist.
But if you’re a minority creative who doesn’t dabble in the adult world, you’ll have a hard time monetizing your ideas. According to Bloomberg, marketers consistently underpay black influencers. Does that mean you should give up on your dreams of influencer success? Not quite. TipSnaps levels the playing field for all creators, irrespective of color.
Lyonel Dougé is the son of Haitian immigrants to America. He grew up watching his mother and father work tirelessly and for very little money. Although they were well-educated, high-paying white-collar jobs were not easily accessible. His father was a mechanic and his mother was on her feet all day working retail.
Lyonel swore that he would figure out a way to earn more money for his family. He graduated with a degree in engineering followed by positions at high-profile companies like Sony, Viacom, ESPN, and Johnson and Johnson (where he currently holds a day job in product management). Despite all of his accomplishments, however, he felt incomplete. He wanted to help his fellow minority entrepreneurs achieve a similar level of success.
Spotting Trends Before Anyone Else
The early days of Lyonel’s career looked great on paper. “I was living the dream, six-figure salary, and yet, I felt unfulfilled.” Lyonel has a knack for spotting trends early. When he was at Sony, he remembers urging management to build a platform to rival Spotify days after Spotify launched. They told him to stay in his lane and get back to work.
Over the next decade, countless people would shut down Lyonel’s ideas – regardless of how persuasively he described them. Finally, he decided to take action into his own hands. “I have valid ideas and I know what I’m talking about,” Lyonel says. “I can build something revolutionary.”
One late night in 2016, Lyonel was scrolling through Instagram. At the time, few people were monetizing their online content, and minority creators were few. “Nobody knew what they were doing,” Lyonel says. “You’d have to be a savvy creator-slash-influencer to land a brand deal. But what about everyone else? Everyone should be able to monetize.”
Lyonel saw the potential and wanted in. “What if a fraction of these people’s fans, even a quarter of one percent, would pay them five or ten dollars a month to see exclusive content. I wanted to build ‘Instagram with a paywall’. So I set about building that, coding nights and weekends. I’ve always held a full-time job on top of this. But I challenged myself to take it a step further and raise people from backgrounds similar to my own. People who didn’t have the connections or the networks, who were creating something from nothing.”
TipSnaps started as a mobile-optimized website. “I didn’t want to build a native iOS-slash-Android app because then I would have to pay the Apple tax. Our business model wouldn’t work if we had to pay a 30 percent fee on every transaction. I launched by DMing people with a million followers and back then it was a lot easier to get a response back. My first client was a fitness trainer with over a million followers. I explained that this would cost her nothing and she would make money from the platform.”
After that first creator, TipSnaps’ growth exploded. “We started accumulating more creators because of the network effect. Her followers, many of which were creators themselves, would ask, ‘What is TipSnaps? How does it work? Are you making money?’ We grew to a hundred thousand registered users in that first year.”
Convincing Credit Card Companies You’re Legit
The payment model was trickier than Lyonel first anticipated. He looked into lots of different solutions and finally settled on Stripe. “Stripe is amazing because they will let everyone open a processing account quickly. It’s almost as easy as opening a Gmail account. Whereas most other credit card processing companies require a robust and lengthy application process. Back then, what we were proposing was very new and did not make sense to the likes of WorldPay or even PayPal. Also, the software integration was very simple.”
Why were the payment processors so reluctant to support TipSnaps? “Surprisingly, the creator economy has higher credit card fraud rates than typical ecommerce businesses,” Lyonel says. “It turns out that bad actors are much more willing to use a stolen credit card on a subscription to a social media influencer than buying a t-shirt on an e-commerce site. At least the t-shirt will physically ship somewhere.” Lyonel has since integrated three more payment processors to help spread the risk.
Creators pay a ten percent platform fee. Half of that goes to the payment processors which leaves TipSnaps a five percent margin. You might think that small for an online business, but Lyonel’s market is enormous. “Somebody with a million followers could have twenty thousand people registered on TipSnaps. The numbers add up.”
Here Comes the … Competition?
Before long, Lyonel heard about another site offering the same service as TipSnaps. Competition had been thin so far, and at first, Lyonel thought this new competitor might be a danger to his fledgling business.
“A couple of guys had a similar idea to mine except their background was running adult cam sites,” Lyone says. “It’s called OnlyFans. I saw the potential for this kind of customer, but I’m a mainstream guy. I’m married, and I want to stay married, so I cater to a different market. How many millions of YouTube views did a creator need to make a hundred dollars? The CPM rates are horribly out of favor for creators. We know that is true for musicians on Spotify as well. Direct monetization is the answer.”
OnlyFans wasn’t a threat, Lyonel realized, and Patreon, which had launched years earlier, attracted a completely different customer. “It’s oriented to very web-savvy and almost tech-oriented creators and consumers. It’s not for everyone.” Patreon always struck Lyonel as elitist and not for the everyday person. TipSnaps was different, and people agreed.
“LinkTree recently published a study that shows there are 200 million creators across the internet. In fact, two million creators have over one million followers, and another two million have between 100 thousand and one million followers. It’s crazy. We know this. When you ask the average fifth grader what they want to be when they grow up, they don’t say doctor or lawyer anymore, they say they want to be a YouTuber or an Influencer,” Lyonel says.
Once TipSnaps reached 300,000 registered users in 2019, Lyonel needed more capital to update the platform. His friends and family, while enthusiastic, were not in a position to help. He started reading everything he could about raising money for a startup. Soon, he was in front of VCs. Many dismissed him. However, he persevered and was able to raise a small pre-seed round from three angel investors.
Elevating People of Color
Lyonel’s experience with VCs left a sour taste in his mouth. Why could similar companies to his raise billions and yet he not be taken seriously? He didn’t want to jump to conclusions, but it seemed like just another example of minorities being overlooked.
“Look at the creator-economy companies that have cumulatively raised billions of dollars post-pandemic. Almost none of the founders are black. Why did the VCs give them money but not me? I had all of this traction. I told them that this was where the economy was going. They didn’t listen. Minority creatives are similarly disenfranchised, overlooked, and underserved. The Black TikTok strike happened last year because creators of color were defining the trends and not getting credit. But so what if you get credit? Credit is still not monetization.”
TipSnaps predicts explosive growth in overlooked niches like black hair and beauty, comedians, culinary arts, and even children influencers of color.
“These are huge niches, there are approximately 1.5 million YouTube accounts around black hair and beauty and 99 percent of them aren’t monetized or YouTube partners. These creators may have something like 500,000 subscribers but they aren’t making much money unless they have major brand deals, and even then, TipSnaps can help. If even one percent of fans will pay ten dollars a month to support you, you can put up an extended exclusive version of your tutorial. Put the one-minute clip on YouTube and the ten-minute clip behind our paywall.”
Lyonel created a new feature that he anticipates will be the next wave of content creation. It’s called “TipPools.” Lyonel explains, “It’s a pay-per-view GoFundMe but for social media. TipPools is fan-initiated and only the fans who chip in ultimately get to see the content.”
In just five years, Lyonel grew TipSnaps to half a million registered users. TipSnaps has paid $2.5 million to creators, taking a ten percent cut of each transaction. “Why aren’t the incumbent social platforms rolling out a monetization feature? It’s a $300 billion business if you think about Meta, Twitter, and TikTok. They’ve got all of this ad revenue but creators don’t see it. I want to ensure that creators can monetize immediately and directly.” In the paraphrased words of Wu-Tang Clan, cash rules everything around. Lyonel makes sure creators see the money.
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