CEO and Founder
Tipify
Years with Company: 3
Address: 108 W 39th St., Suite 1006 #2013, New York, NY
Web: tipify.music
Email: dan@tipify.music
BACKGROUND
Tipify is a fresh way for fans to monetarily support the artists they’re into. Founder Dan Carucci is a scientist, not a music industry insider, but he has a long history of tackling tough challenges. The downloadable app arrived in March.
Doing the Right Thing
I’m a physician and molecular biologist. I was the U.S. Navy physician and ran their malaria vaccine program. When I retired from the Navy, I worked with the Bill and Melinda Gates Foundation on global health programs. Then I found myself as the chief medical officer for McCann Health. I spent my life working in women’s and children’s health in sub-Saharan Africa, Afghanistan, and Pakistan. The common thread for all that and Tipify is there are inequities in the world that need to be fixed. Somehow, I find myself involved in those kinds of things. There’s no money in making a malaria vaccine, but it affects millions of people. Getting women to breastfeed doesn’t make a lot of money, but the impact is high.
A Revelation
About three years ago, I was talking to a couple musicians. They told me about the streaming services and the fact they get paid so little. Even if you have a lot of streams, you make only a couple thousand dollars. “You’re telling me all the money I’m putting into subscription services doesn’t actually go to the artists I’m listening to?” I felt that was fundamentally unfair. There should be a way to know what artists I’m listening to and a way to support them. That’s how Tipify started.
Generating Trust
The connection with artists is there. But how do you tap into it? It’s a matter of making sure artists understand it exists and empowering fans to use it. We launched in November after about two years of development. I have a good team. The infrastructure is there. It all works. Now it’s a matter of—how do we get it out so people trust it?
A New Fan-Powered Artist Discovery Showcase: Road to Austin
We started having conversations with SPIN, and they were like, “This is pretty cool. Let’s do something together during the week of SXSW.” So we have a partnership where we’re going to showcase Tipify artists. We want emerging artists to sign up for consideration, and SPIN will do the editorial process. We’re super excited about that.
The Power of Music
I’ve always been a music lover. I was sitting in the middle of the Serengeti in Tanzania waiting for my puddle-jumper plane to pick me up. It was hours late. I’m sitting by myself under a tree with my iPod. And I remember listening to Elliott Smith. Here I am in this remote place by myself, and I’ve got my music. It was comforting.
Jumping In
I probably got into this because I didn’t know what I was doing. Throughout my life, I’ve always said yes to everything. There was an opportunity in the Navy—“Do you want to fly airplanes?” I said yes. I could barely swim. I had to teach myself to swim a mile, which I’d never done. My boss retired, and they needed someone to take over the malaria vaccine program. I’d never made vaccines before. When I ran a $200 million program for the Bill and Melinda Gates Foundation, I’d never done that before. I don’t know that I’m particularly fearless, but for some reason I don’t mind putting myself out there.
Fans Will Pay
I knew [Tipify] was a great idea. We’d done market research showing that, for those between 18 and 34 years old, 60 percent of them would pay one to five dollars a month for their [favorite] artists. That’s enough to go with right there.
How It Works
We take five percent of all tips. And Stripe, which is our financial system, takes about five percent. So the artist gets 90 percent of the tip. The first thing they have to do is create an account, which is free. Then they claim their profile. You sign up with Spotify. We have a database of about 600,000 artists from Chartmetric. There’s a verification process through Instagram, just to make sure you’re the person you say you are. The second step is ID verification through Plaid. And the third step is creating your Stripe account.
As a fan, it’s much simpler. You just find an artist you like, push the button, and say how much you want to support them by. Maybe you want to make it monthly. You can use Apple Pay, PayPal, or a credit card, and the artist can pull the money into their bank account whenever they want.
Artists Are Already Providing Something
The problem with Patreon is it costs money for the artists to sign up. They have to provide something of value beyond the music they’re already creating, such as podcasts, merch, or new releases. That’s flawed. They’re already making the music we’re listening to. Why should they put more money, time, and energy into something to get more money?
Paying Fans Exist
There are four major revenue streams for artists. One is streaming, which doesn’t pay anything. Then you’ve got touring and live performances. There are problems with both of those, depending on where you are in your career. There is merchandise, which costs money to produce and ship. And then you’ve got licensing and royalties. From my perspective, we’re missing the biggest one, which is the direct fan-to-artist connection. If a band has 800,000 followers and one percent of those fans tip a dollar, that’s $8,000.
Fan Connections
At Tipify, the artist can contact fans directly. Our system allows fans to be stratified by geography. If a band is going to be in Brooklyn, they can sort by Brooklyn and say, “We’re going to be here. Here’s a promo code to get in.” With all the other tipping platforms, they’re very one-way. There’s no connection between the artist and fan. There’s nothing that provides for any longevity. It’s a one-off tip.
Artist Discovery
Our platform allows you to discover artists, because you’ve been listening to music on streaming platforms. Right now, [our users connect with] Spotify, but I think we’ll be adding Apple Music and probably Tidal soon. And then we’re going to do an artist recommendation feature. Our algorithm is going to be based on fan engagement. Let’s say you and I both like artist A, and you also like artist B and I like artist C. The app’s going to tell me, “Maybe you should look into artist B, because you both like artist A.” It becomes because of our interaction.
The Data Speaks
We’re going to have a huge amount of data that we think A&R people may be interested in. Say you want to find out who is the next up-and-coming artist; here are people supporting [a particular musician] financially. That’s much more meaningful than a like or a follow. Venue owners are willing to schedule up to 25 percent of their venue to emerging artists, but they do that at a risk because they don’t know if anyone’s going to show up. But let’s say it’s a venue in Dallas, TX. Here’s an artist that’s from Dallas that has a substantial Tipify following. They’re going to be more willing to put them on their schedule because they know the artist has paying fans.
Be Part of the Solution
People say, “Tipping’s gotten out of hand. Someone makes you a cup of coffee, and you’ve got to tip for it.” The difference there is you’re already paying for something. This is an opportunity to do the first thing, which is pay for what you’re consuming. Here’s a way to feel good about supporting artists you love.
