Recently I was made aware of a micropayment “donation” website, kachingle.com. I would like to be able to open this commentary by saying that the core concept of Kachingle is interesting and sound, but if this is the first you’ve heard of Kachingle, I don’t want “Kris had a nice thing to say about it” to be your initial impression. Most of what I have to say is extremely negative.
Okay, you know what — I have to present the core concept to discuss why Kachingle is doing something absurdly irresponsible. So here it is. Micropayments don’t work, as they have been presented in the past, because I can’t afford to give 25 cents — even 5 cents — to every site I use and like on the web. Even in those tiny increments, we would be talking about $30-$60 a month, and I’m not willing to pay that, even though if pressed I would say most of the sites I use deserve it.
Kachingle asks, okay, what if we made the upper bound on your spending each month $5? Whatever number of sites you wish to say thanks to, they’d split your $5. If there are more sites, they’d all make less, but at least they’re getting something, and the good news is you’re not on the hook for more than the $5. That seems kinda reasonable, right?
Not the irresponsible way Kachingle is managing it. This is not the micropayments solution provider anyone asked for. And I think Kachingle knows it. This is how they present it:
Imagine you visit my site chainsawsuit.com. You enjoy the comics and you want to give money to me, Kris, the creator. This requires that you forget:
- the fact that by just viewing the site, you up my pageviews and I serve more ads, which pays me;
- the fact that if you want to give me money and get something great out of it, you can buy merchandise from my store;
- the fact that if I wanted people to be able to donate, I’d have a Donate button on my site.
“Never mind all that, Kris! As a user of your site, I want you to receive a little cash from me as my thanks.” And as a user of chainsawsuit.com, in order to donate money to chainsawsuit.com, you would go to which URL?
You’re right: kachingle.com. Obviously!
So you go to kachingle.com and notice that Chainsawsuit doesn’t have a profile on there. That’s okay — as a user, you can register my site there yourself. (In reality, Chainsawsuit does have a profile on there. A profile which I didn’t create, nor did I agree to the existence of, nor was I even aware of, nor did I give permission for Kachingle.com to accept money on my behalf.)
Okay, you’re all set to donate. You fork over $5 to kachingle.com, and they hold onto it. You “Kachingle” the Chainsawsuit account (their preferred verb) and now the Chainsawsuit account is in for a cut of that $5. Wait — I’m sorry. The cut that the account is in for is $5, minus Kachingle’s 15% fee for providing this service.
I want you to understand what just happened. Without any permission from me — possibly without the permission or knowledge of any of the “member” sites on Kachingle — Kachingle has just made a little money off of your generosity that was intended for me.
Here’s the amazing part that takes it from naive to insidious: because it’s not opt-in — that is, because the owners of the sites that have an account on Kachingle don’t need to be present for that account to be created — it behooves Kachingle to list as many websites as they can. That lets them play the numbers: maybe someone browsing Kachingle realizes they like a site listed, and they Kachingle it. Kachingle.com gets a cut. They get a cut anytime a Kachingle user donates to a site they like, one time a month. So of course, as the business, you’d want to increase the chances of that first donation every given month. If you want, you can see who donated initially to most of the accounts listed on Kachingle: it’s almost entirely Kachingle employees doing it.
I guarantee you no Chainsawsuit reader thought “huh, I’d love to donate to this site” and ran over to Kachingle to do so. Kachingle did that, not you, oh loving reader.
In fact, Kachingle.com offers a browser plugin that sits on top of any site you visit, meaning you could be reading an article by some columnist at CNN.com and, in a fit of generosity, decide to Kachingle it. I don’t know how the plugin works; if you can donate per-URL or if it resolves to the root domain. (Hmm, so does the money go to the columnist?? Or to CNN?)
By the way, CNN.com can be listed at Kachingle. Google.com can be listed on Kachingle. In fact, Google Maps is listed there. Do you think Google is going to be excited about some third-party website accepting donations for them? Google, one of the richest companies in the world? So what happens when it’s time to pay the site owner? Who at Google gets contacted with the exciting news that there’s $4.84 waiting to be collected?
The New York Times filed an injunction against Kachingle late last year for this very reason: the newspaper wasn’t happy with donations they never agreed to let Kachingle collect on their behalf.
It is a total crock. Over time, maybe the site would have built up to the point where it was a more natural progression — especially if they had content providers on their side promoting them. But we have no reason to. We don’t even have reason to be neutral about them.
This is another sketchy part. Kachingle just starts accepting donations for sites, without the sites’ knowledge. Maybe they have some money for Chainsawsuit now. So how do I get paid when I don’t even know that money exists? Kachingle’s own Twitter account explains, in a response to a querying Indigo Kelleigh:
@indigo_k We… attempt in about 20 ways to reach the sites. If after some period of time we cannot, the money goes to a charity.
What are the “about 20 ways” to try to contact a site owner? Are there really 20? I would love to see them listed. Can I tell you how I was contacted about Chainsawsuit? Kachingle tweeted at me, once. You know who else tweets at me? Spambots that also say I can make money now. How should I have differentiated their tweet from those?
Scott informed me that Kachingle’s president and creator, Cynthia Typaldos, was holding a live online chat and answering questions. I brought these problems up with her and I was civil. I was not interested in vitriol or tearing her down. I wanted to know if she had considered these things. You could hear the defensiveness in her voice — not the defensiveness of someone caught in a lie, but rather that of someone who just wanted to do This One Thing and that she’d figure out all the details once the ball started rolling. That is not the way to run a business. Her answers can be summed up thusly: I appreciate your concerns and your input, but we have chosen to do it this way.
If Kachingle was opt-in instead of opt-out, it would solve everything. If Kachingle sent an e-mail to lots of different site owners asking if they’d like to opt in, it’d be fine. Kachingle could even allow visitors to create profiles for their favorite sites — those profiles would just remain hidden until the site owner could be contacted so they could opt into the program.
But we know why it’s not opt-in, don’t we? Because I guarantee you 99% of site owners would say “Wait, what? No. No thanks.” Or they wouldn’t respond at all thinking it was a come-on. That’s what I would have done. No, making Kachingle an opt-in service would be the responsible approach, but making it opt-out means they can start collecting money from you right now with no permission or awareness necessary on the part of those who should have been aware from the beginning.
We cartoonists have seen the same reasoning used by comic scrapers, which I have written about in the past. People that co-opt others’ content or brand or goodwill are stealing. They are thieves. It doesn’t matter how good-intentioned it may be. It is possible to be a thief, but actually think you’re helping.
Do I think Kachingle is evil? I don’t. No, if Kachingle were evil they’d have a better answer for these questions. They don’t. In fact, they have terrible, poorly-thought-out answers. If you read any of Typaldos’ writings, it seems like she is earnest about wanting to do something good. But it is such a rotten approach, and when questioned, is met with a brick wall of defensiveness. Kachingle is not going to learn that what they’re doing is wrong. I guess that starts to make the case for evil, hmm.
Many eons ago, I belonged to a webcomics collective that took it upon itself to collect money for the victims of Hurricane Katrina. We raised on the order of $30,000, which we stated would be donated in its entirety to the Red Cross. How did we ensure this, with no claiming of fees or cuts?
There actually was no way to do it directly. We would have been up Kachingle Creek had we implemented it that way, and we probably would have been sued by the Red Cross and had the money frozen by PayPal or whatever online banking equivalent we chose. Our donation button just passed through to the American Red Cross’ own donation page. We never touched a dime of it. So our tracking could only estimate donor amount and intent with a reasonable margin of error.
Of course, we didn’t do it for money. Kachingle is a business, and they want a fee for their microdonation solution. Here’s another suggestion for Kachingle: if you want to get paid for that, then sell your implementation to content owners. Repackage it as a widget or script that the site owners can install as a one-click PayPal solution. Although, now that I’ve typed that, I’m thinking PayPal wouldn’t allow a one-click implementation on sites, because people could be tricked into clicking it or accidentally click it.
That poor core concept. The $5-per-month-split-x-ways idea? It’s the best micropayment concept I’ve heard of. Which I guess isn’t saying much. But that sliver of a good thought lies buried beneath all this nonsense, which ranges from irresponsibly naive, to irresponsibly conniving.
If you made it this far, thank you and congratulations. Now go find out whether your site is a Kachingle affiliate and if they made any money off you recently. I have asked that my sites be removed. I recommend you do the same thing. If you want a donation, make a PayPal button. You keep it. You don’t need another middleman on that line. PayPal is already a middleman, albeit a much more needed one. Kachingle is a middlemiddleman.
Postscript: Something else occurred to me just now. I can ask that they remove chainsawsuit.com. But what happens when I launch a new site? Do I have to inform them to block that one too? After all, I don’t have to be around for it to get added. I can’t fucking police Kachingle every time I put content on the internet.
Post-postscript: Let me turn it around. Starting right now, I will be collecting donations for Kachingle.com. If you like Kachingle, send me money. I will later give Kachingle 5% of your donation. I know it’s a lousy deal and I’m keeping 95%, but they should be happy to be getting some money, right?
Of course, they’re welcome to opt out.
Well it's good that they aren't actually villains, but it's a scary combination of inability to recognize a bad idea and just enough ingenuity to make it happen anyway.
Actually, sounds like fraud, at best, to me (IANAL). They are acting on behalf of a third-party, without the third-party's knowledge.
So, when the twenty methods fail, or the creator simply declines, what happens to all the money in the 'dead donation box'?
Is it returned to the users' accounts to be used next month? Or does it fall into the pockets of Kachingle's owners?
My understanding is that the money is donated to charity. Minus the 15% they take, of course.
Kachingle's owner(s) may be nice or naive or clueless, but at the end of the day they are profiting from your IP without your permission and that makes them villains. If you caught a guy selling his own Starslip-inspired shirt designs he could protest that he genuinely didn't know it was copyright infringement: I don't think you'd accept that response. Kachingle is crooked as hell.
you know what? i don’t think that’s the right share ratio. tell you what kris, i’ll give you 10$ to share with them 0% and to tell kachingle that you recieved a nice donation in their name as well as any others, and that you’ll be looking after it for them until such time as they see fit to shut down their site
It actually seems worse than merely naive. You have to earn $100 before they attempt to send funds to you and you have to fill out a w9. So for many sole proprietor small time content providers some strange website you've never heard of will contact you and ask you for your social security number in exchange for $100.
From their terms of service:
"… the minimum Pay-Out shall be $3.35 per Medallion (including transaction and other fees which Kachingle absorbs)"
The part you saw was probably this:
"If you are a Site Owner, we will need taxpayer information in order to make payments to you, once you reach the $100 threshold."
So basically, if you earn over $100 with them, you need to fill out tax info. But the minimum payout is $3.35. I think their statement about the tax info is poorly-worded, since it definitely looks like it's the minimum payout.
thanks, I see it now. so I suppose if they believe if they have already sent you $99 you're supposed to be ok with giving them your SSN or EIN? I wouldn't.
I use WePay whenever I experiment with donations.
Pingback: Kachingle and the Transgression of Opt-Out | Kris Straub | humor scientist from blog The Technology blog and podcast
I don't think they're crooked. I think that it's just so impossible to believe that there are people so naive as to believe that this business model is possible that they seem crooked. We have to assume they're crooked because nobody could be this stupid.
Why would users give 5 bucks a month for nothing? They're spending 5k a month for nothing in return. Right now it's obvious that Kachingle is populating it's own service by signing up sites. The CEO admitted to me directly that they were unable to get anyone to opt-in initially and that's why they decided to take the site owners out of the equation entirely.
Let's assume that Kachingle is crooked. That they've got something up their sleeve. Even then it won't work. It all hinges on building a user-base of web-surfers who actually believe this is the best way to support their favorite sites.
If you want to donate to kachingle but don't want to deal with Kris just e-mail your bank account info to ripyouoff@hahaha.yourefucked and I'll hook you up.
If you don't read any of the above, no matter how you feel about the service Kachingle provides, here is the reason why it's bad faith:
Kachingle makes its users believe that Kachingle has an agreed-upon relationship, but none was ever agreed upon. They make it look as if site owners have voluntarily signed up with Kachingle, when the owners did no such thing. Even if you agree with Kachingle, their stance is still a lie of omission. If you disagree with them, then you believe they are outright lying. There's no upside.
I think the New York Times kerfuffle from last fall tells us a lot about the character of the lady behind Kachingle – it shouldn't take a cease and desist letter to convince you that somebody doesn't want to be a part of your business plan. You'd think that it would be a sign that she's pissing off the very creators that her service claims to want to help, but some people are stubborn and this might just be one that doesn't get it until she pushes someone hard enough for them to sue her out of business.
This is a thoughtful and very useful writeup, Kris, but to everyone who thinks this is an inherently shady idea, I'd urge you not to confuse a bad implementation with a sound core idea. Kris is right – when starting up a service like Kachingle, it's vitally important the parties starting up the service be clear, accurate and forthright about how the system works.
Flattr *is* forthright about their business model and how they work with publishers / payees, and is an opt-in service besides. It seems to be working OK in Europe. I don't think it's ever going to be as disruptive or transformative as it would like in its current form. For a service that moves around such small amounts of money, it's vital that the volume be kept up and that lots of people be using it frequently in order for it to realize its true potential.
I strongly believe there is not a fraudulent bone in Typaldos's body. I spent most of last year working on a service that looked a lot like Kachingle (although there were many differences that would have dealt with some, but not all, of Kris's concerns). As part that work, I did some pretty serious due diligence on Kachingle. What impressed me most was their near-total naïvete. There is a lot of magical thinking in their business model – they do a lot of presuming that it's better to beg for forgiveness than to ask permission, and assuming that if they can get the service to scale, everyone's automatically going to see the wisdom of their model. They also, as Kris points out, take a lot of short cuts. I don't think that amounts to acting in bad faith. Hanlon's Razor: Never attribute to malice that which is adequately explained by stupidity.
Finally: Kris, merchandising and ad revenue have served you well, but I believe that's not a model that suits all creators. Not everyone in webcomics has your business acumen, and some artists would much rather spend their time drawing and improving their skills than worrying about business plans. There's a lot of surplus value and goodwill sloshing around the webcomics scene, and there are really only a few basic ways of converting that back into income. I think there should be more. I would love to see more people who make art I enjoy getting paid to do what they love, which is what I ultimately think services like Kachingle and Flattr are aiming to achieve.
othiym23,
As to your final point, no one said "everyone should make their money on advertising and merchandise, end of story." I never said that model should suit all creators. If you want to accept donations, if you want you try on micropayments, do it. But don't tell me that you have MY micropayments waiting to be deposited. I didn't sign up for them and I don't want them.
And I guess I can attribute Kachingle's missteps to stupidity or naivete rather than "evil," but if a monkey finds a gun and starts shooting everyone, you don't shrug and say that was bound to happen. You wrestle the gun out of the monkey's hands.
Kris, what’s your take on Flattr? I’ve been reading your critique and the comments with great interest as Flattr (where I work as the community guy) is “same same but different” as the saying goes.
The basic idea is the same – you set yourself a monthly budget (minimum €2) and flattr sites, at the end of the month the amount gets equally divided between things you flattred.
The difference is that authors a) have to sign up (creates a profile on our site); b) can put a one-click donate button on their site; c) you can flattr Twitter accounts but if the account holder doesn’t claim the donations then the money stays with the giver.
Flattr takes 10% fee from money taken out of the system (€10 minimum sum), but this is waived for charities.
Would be interesting to hear how we could further improve this system to find wider acceptance and adoption.
I'd be interested in your take on Kachingle, because it sounds like they took Flattr's idea and removed all the reason and sense from it.
The only real point I can argue — or care to argue — with Kachingle is how the service is opt-out, and not author-driven but user-driven. If they wanted to create an opt-in service where you fork over $250 and your site's FTP login and they delete your site's content, I would say the people paying for that service were being taken for a ride, but there's nothing illegal happening.
This will sound stupid-corporate-PR now but we don’t really comment on our competition, what they do or how they do it. Flattr is the way it is because the founders and team think this is the winning setup for doing any kind of micro donation system and so far the user feedback and adoption numbers support our instinct.
Interesting. I missed this point when I looked into Kachingle. I was just going to write a post about the differences between Kachingle and Flattr. I'll have to take this into account now. It is troubling. However, I hope Kachingle doesn't sour the whole idea of micro-payments.
In the web fiction/indie writing sphere where even good authors have a hard time getting paid and even indie-friendly readers are hesitant to shell out cash, micro-payments are a very useful tool. As an avid reader, it's pretty much my only option to show appreciation to the writers I like, and as a piddly little writer without much clout in the writing world, it's one of the only ways to get a little reward for my work.
But I sincerely hope that the future of micro-payments looks more like Flattr than Kachingle. Besides not taking money intended for someone else, Flattr is more community driven than payment driven. The focus–clear from their website, tweets and everything I've ever seen from the Flattr folks–is showing appreciation and support for people that give us stuff for free rather than raking in the cash (though apparently some popular creators are doing rather well with that too.)
And I don't know about this:
"…but we know why it's not opt-in, don't we? Because I guarantee you 99% of site owners would say "Wait, what? No. No thanks"…"
Flattr is opt-in, and while their numbers are still small, they are growing. I think new and small-time creators especially are deciding to opt-in, not for a large revenue stream but for the community, and also because of the patchwork nature of making money online–a little here, a little there, everything helps.
Pingback: Flattr and Kachingle – What’s the difference? « Cheap Ass Fiction
Pingback: Newscast for November 27th, 2011 | The Webcast Beacon Network
Pingback: The Perils of an Opt-Out Web Service
I had an interesting experience with Kachingle. I had met the CEO, Fred Dewey, awhile back. I knew that Fred Dewey promotes what he calls "love based leadership". He says he believes in a leadership style that is based on trust and love. I had the impression that he felt good things could happen when people in leadership roles started with the premise that people were, at their core, basically good. Philosophically, I am roughly in agreement with that premise, though I might quibble with some of the details. And I felt that people were overly suspicious of Kachingle, because I knew that Fred Dewey was a person who often spoke about values. He seemed like someone who was concerned with issues of ethics.
Fred Dewey and I talked, on and off, for a year, about the possibility of me working for Kachingle. I was busy with other projects for awhile, and they were busy looking for investments. But after about a year, we reconnected, and we agreed to work together. They didn't have the money to hire me full time, so I worked part-time. Kachingle is in California and I live in New York, but we agreed I could work remotely. But of course, I wanted to meet the team, so we also decided that, not long after I started, I should fly out to California and meet the team.
As it turned out, I worked for Kachingle for 1 month, and then left. I've written about this elsewhere so I won't repeat everything here, but, in summary, working for this company was a surprising (and disappointing) experience. There was a shocking amount of confusion, and some ugly internal fighting. We had long meetings discussing new features, which I found interesting but which had no audience. There was a strange disconnect in the company — a lot of brainstorming about features that sounded very cool from a technical perspective, and yet no effort was made to find out if any customer would ever actually want such features.
Regarding work, my preference is to work with startups, and since 2002 I have mostly worked with startups, and I am aware that they are often chaotic, but I have never experienced anything like Kachingle. There was a lot of confusion about who was actually in charge: Fred Dewey was the CEO but Cynthia Typaldos was the founder — when they disagreed, who should be listened to? On the engineering side, there was confusion about who could do what and on what servers. When I got back from California I thought about all that I had seen and heard, and I decided it would be best if I left. And then, when I said I was leaving, they decided not to pay me for the 2nd half of the month that I worked. I thought that was funny, mostly in the sense that the pettiness of it was so ridiculous. Anyone who is interested in some of the details of this experience can read them here: http://www.smashcompany.com/philosophy/a-sad-time…
Having spent some time working in this space, and researching companies that focus on micro-payments for content creators, I am left with a better impression of Flattr, mostly because the idea is so simple: this is a "Like" button that has some money behind it. It's important to note that I just summarized the idea in 11 words, something that is impossible with Kachingle. Kachingle takes many paragraphs to explain, as this blog post makes clear. Flattr is extremely simple: we have all occasionally clicked a "Like" button, so the thought of a "Like" button that sends some money is easy to understand.
After I left Kachingle, I got into a conversation with one of guys at Flattr, on App.net. I am left with the impression that there is a certain amount of pragmatism at Flattr, at the very least an understanding of why it is important to start with an idea that can easily be communicated. My conversation was here: https://alpha.app.net/lkrubner/post/1817623
At this point, I can say with some confidence, there may eventually be a company that figures out how make micro-payments work as a method of funding content creation, but that company will not be Kachingle.