Start-Up Story: IndieKarma Micropayments

This article is from Brad Peterson who contacted me many months ago to ask for feedback about his new Internet business he was working on dealing with micropayments online. Brad and I kept an email dialogue going for many months as he continued to refine his business concept. He’s about ready to launch his new start-up web business so I asked him to write us a brief story about how it all came about. Here it is…

Oh, and by the way, Brad didn’t pay anything for this – I just asked him to tell me his entrepreneur story as content for this blog so if you have an interesting story about your business, not an advertisement though, please get in touch and maybe your story can be here next.

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It all starts with an idea – a hunch really, that if only this, that or the other worked, it would be really cool. People would like it, it would solve a longstanding issue, and it might grow into a profitable business.. The “it” could be anything. That’s the genesis of most start-ups in my opinion.

For me, at indieKarma, the “it” was trying to solve the long standing online micropayments issue. For many years now people have have generally recognized the potential benefits of paying and collecting “micro” sums of money – if only given a micropayments system that worked! So far pretty much everyone who has attempted to provide a working micropayments system has failed. The reasons are many, but generally involve the need to pre-fund user accounts with an amount far greater than a single “micro” payment, and the cumbersome “yes” / “no” decision making process that users have been made to go through every time they are presented with an opportunity to spend a “micro” sum on something, whatever it might be..

Despite all these big issues, at indieKarma I still believe that many readers of blogs and independent website content would not mind, in fact would want to, monetarily support the creators of such content if there was an easy way to do so. After years of work that has seen our initial application altered countless number of times we’ve come up with our indieKarma application.

The key difference between what we’ve put together and any previous micropayent applications is that indieKarma is seamless. Once a user signs on (and has made the decision to support independent content), they have a penny removed from their account each time they visit any blog or website on the indieKarma network. These seamless payments, we believe, are the key to adoption of a system like this. Once a user sign up with indieKarma, their browser is logged into our system (even through browser restarts), and there is no clumsy “yes” / “no” process to go through.. it just happens. If a user does not have an indieKarma account – they see a little graphic at the bottom of the blog or website with a little “guilt trip” message asking them to join – if they do have a account they see a quick “thank You” at the bottom of the page.

We also think that one cent, although it may not sound like a lot, is a perfect price point. To the end user, one penny a visit is inconsequential, and thus removes any worry that “too” much might be spent at one blog or another. To the blog or website owner this can add up quickly. If one assumes for blog owners that most visitors generate one page view (as they read the latest post and then leave), at one penny a visit – that’s a $10 CPM from the readers who have signed up (which is really damn good).

I have high hopes for our new application. The next six months will tell us if we are yet another group barking up the wrong tree, or have finally created a workable micropayment system – a micro-support application.

As a side note – we have decided to fund the first 5000 accounts for free – each one getting a free dollar, so if you are a blog or website owner looking for a way to help support doing what you love.. Check us out http://www.indiekarma.com. We would love to hear form you!