Cynthia Typaldos from Mountain View, California (renowned as world headquarters of Google), is the woman behind Kachingle. That’s the name of one of several social micropayment systems, whose medaillons and buttons are popping up on more and more blogs and other websites. (another such system is flattr). Kachingle now has a network of almost 160 websites with an astonishing share of approximately 30 percent sites from Germany. This blog, too, sports a Kachingle medaillon. You can click it and thus turn it on or – if you’re not a member yet – become a member. Yon can then distribute a monthly amount of $5 to your favorite websites (which need to be Kachingle members). That’s really simple, isn’t it? I interviewed Cynthia via Skype (I’m based in Cologne, Germany). We talked about:
- why Kachingle favors giving contributors only a few choices (the paradox of choices)
- if social micropayments (crowdfunding) can become part of new business model for the newspaper industry
- why publicly supporting your favorite webcontent is part of your persona
- if social micropayments can become a new social movement
- and more.
This is the original English interview. Click here to read the German translation.
What does the word Kachingle mean?
Cynthia Typaldos: I made it up. It’s a combination of the word “kaching” which is the sound of the old cash registers and “jingle”, the sound of coins. I don’t know how it sounds in German, but in English it sounds very cute.
What made you start Kachingle?
I actually got the core of the idea in 2003. My best friend Laura in Argentine became ill with brain cancer. Her English wasn’t good, so she asked me to research her disease on line. I gathered information from all over the web and put together a report for her. And when I was done I wanted to go back to those places where I found the information and reward them, take a hundred dollars and just give it to these various places. But I didn’t have any way to track where I had been. It didn’t matter to me whether it was a non-profit organisation or a blog or a discussion board. I just wanted to make sure that site was going to be there for the next person looking. In 2004 and 2005 I started working seriously on this, putting together the whole concept and meeting with various people. And then I put it aside, because I realized it was too early. I came back to it in 2007. (Cynthia tells more about the history of Kachingle in this video).
What was missing back then?
A lot has changed since. The main thing is social networks. The whole power of social networks and people wanting to share who they are and what they’re doing. Kachingle is not designed to be a destination site. We’re working on a Twitter application which will be coming out soon where you can tweet what you support and a Facebook interface, because that’s where people want to tell their friends what they’re doing and which sites they care about. That’s where they develop a persona about the content and services they use on line.
Does that imply that people will be able to donate to Twitter or Facebook profiles?
It’s possible. We’re looking at that. But we’re very user-centric. Any time we make a decision about a feature we look at it from the user’s point of view, not the producer’s point view. They want to develop a reputation and a persona aroung the things they support. That implies that what I support has to have a name. It can’t just be little pieces scattered all over the web. But we’re giving users the choice. You can share what you support or stay completely anonymous.
How can contributors be sure their money goes to the right places?
We’re being totally transparent to the user. We show the money flow. Because we’re a third party in the middle we need to prove where every penny of everyone’s money went. That’s what I call “crowd-sourced auditing”. The contributors can track their money and the sites can track the money that they’re bringing in and those things had better add up. So there’s no way Kachingle cannot distribute the money fairly. And that, we felt, was really important. We’re building trust, but you don’t have to trust us, you can see for yourself.
A high proportion of German blogs are early adopters of Kachingle, although blogs don’t have the same relevance in Germany as they have in the United States or in France. Do you have an explanation for that?
Actually, I was going to ask you this question.
I don’t know the answer. I know many of the German bloggers who have joined Kachingle. They say they love the idea of a voluntary support system and want to promote the idea – just like I do. But that doesn’t explain why German much more than French bloggers take to Kachingle.
We speculate about this, too. Our core team is team is six people. Two of them are Americans, three are German, one is French. I’m beginning to think that’s not a coincidence. There’s something about Kachingle that resonates with Germans and makes them want to be early adopters. There seems to be the idea of giving back and making sure we don’t run into a tragedy of digital commons that we have in the real world. The tragedy of the commons, that if everybody just takes and nobody gives back, then a lot of good things will disappear.
The German newspaper industry is arguing the “culture of free” was a birth mistake of the internet. There are big regrets among newspaper publishers that they didn’t put up paywalls straight away and now it might be too late.
The newspapers are whining and crying, although I’m happy that we have vorwaerts.de among our sites. It’s our biggest site and I really applaud them for taking the leadership in the newspaper industry. And besides the German bloggers we now have at least 3 or 4 travel sites and we just got a Swiss train-watching site. The bloggers are always going to be the early adopters, but these other sites are really important, too, because they can take the idea to the mass consumer who doesn’t necessarily read blogs.
In order for Kachingle to really take off, wouldn’t you need the attention of influential American media blogs?
Outside the narrow space of media blogs the ordinary consumer has to buy into it. We’re focussing very hard on increasing producers, because we think that’s what will attract users. Users really want to be able to see a set of sites they can kachingle. Right now, certainly the early adopters putting Kachingle on their sites are talking about it and encouraging friends and family and colleagues to also join. But it’s very typical for web services to start in a niche. Facebook started as a college network. We’re discovering our first niche is probably going to be the German market. We’re taking this very seriously. As of now the Kachingle medaillon is available in German and we will be rolling out some more features specifically for the German market.
Why doesn’t Kachingle enable sponsoring indivual posts (like flattr does), but only whole websites?
The scope of the medaillon, the area which it defines, is simply based on where you put it. A large site or a site with several authors can have many unique medaillons. Vorwaerts.de is going to have many medaillons or a blog like Carta could conceivably give each author their own medaillon. Again: It’s designed from the user’s point of view. If a site has one voice then it makes sense to have one medaillon across the whole site. If there are many voices and the user sees them as distinct, then you can choose to have different unique medaillons.
So kachingling does work for individual posts, if the site enables that option?
Technically, you could actually put a different medaillon on every post, but that’s not what we think is user-centric, because the user can’t build much of a reputation. Another thing is: I looked for a system that the typcial web user could get into and that implies that people really don’t have to do anything complicated. That’s why we make singing up as easy as possible and why you can only put up five dollars initially. That‘s the „paradox of choice“ phenomenon. If you give people choices they start wondering how much they should be giving and might be overwhelmed.
Many blog readers don’t click through to the websites but read the blogs feeds instead. Will there be a Kachingle for feeds?
Absolutely. We’ve already been asked to do this by bloggers. With new features we’re letting the market guide us what should come next. The first thing we heard loud and clear is improvements for the German market. That relates to language and to Paypal.
How are you going to address the Paypal issue?
We’re talking to them. We believe Paypal is an absolutely great platform for the future of micropayments. But it’s not fully there yet. It doesn’t seem right that we have to pay both incoming and outgoing transactions fees. These add up to 11 percent which is too much, and Paypal agrees. Soon we will be able to lower that rate. We’re also helping Paypal figure out the German market and the fact that Germans really like the direct deposit mechanism. Germany is the second largest Paypal market and therefore it’s incredibly important to them and their owner Ebay. They are eager to work closely with us, because they see us as innovators in what we call “social cents for digital stuff”. Paypal thinks the market is going to be really big.
Can crowdfunding be a small part of a solution to dying newspapers?
We hope we’re going to be a big part and we hope they won’t be dead by then. Some of these sites are very large and that of course is very attractive to us, because it only needs a few percent of their users to become Kachinglers in order make serious money, both for us and for the newspaper. The other great thing though is – it’s not just the money. Our system is social. Users are building a reputation, they are thinking about the way they define themselves. Is the fact that I read “Vorwärts” part of my persona? Is it important for who I am? Then I am going to turn the medaillon on. The other reason – and that’s the probably the reason why it’s taking off in the blogosphere – if you see a colleague kachingling your blog, you might think, maybe I should go and kachingle their blog, too.
So kachingling needs to become a new social norm?
We’re encouraging all sites to reach out to their passionate users and get those people to sign up. Many sites know who their passionate users are because they are the ones who make all the comments. When you see other people like you doing this that’s how you create a new social norm. The real difficulty for any system like this is creating a new social behaviour. At the core people know this is the right thing to do, but they need to see others doing it to follow their example. That’s why we have all these social signals on our site.
The German media consultant Robin Meyer-Lucht, publisher of Carta, coined the term “promoting a culture of responsible payment” when he wrote about new financing models for media and about Kachingle in „Spiegel Online“.
I love that term. I read the article through Google Translate, but I didn’t get the nuances. I absolutely agree. It will take time and a number of key sites and maybe even celebrities to stand up and say, this is the way to go. But we’re in it for the long run. The early adopters are the ones that can make that case. It’s almost a new world attitude, like a new movement. It’s part of a democratic society to show which causes you support.