As someone who is absolutely in love with the food and arts scene of Melbourne, I am always keen to hear stories of startups that are harnessing digital technologies to support local and early-stage ventures.
FanTipper cofounders Ash Millott and Nicholas Isaacs are two such entrepreneurs helping to transform the humble tip jar into a cashless digital platform for early-stage fundraising and brand awareness. Tips from loyal patrons have a very long history within arts and hospitality, and FanTipper is taking the whole concept online.
Ash, a lecturer in digital media design, and his long-time friend and farmer Nick shared their insights from their exciting FanTipper journey and the plans they have for growing their startup.
Cashless tip jar FanTipper co-founders Ash Millott and Nick Isaacs (Courtesy Ash Millott)
Inception of the cashless tip jar idea
In his many years of work as a 3D animator, Ash listened to copious amounts of music that brought him great joy at the workplace. He recalls, “I had formed a heartfelt connection towards this one particular album and wanted to make a genuine contribution towards their work. However, I realised that there was really no way of doing that. That is when the idea of a digital platform for supporting creators with tips came to my mind.”
Ash pitched his idea to Nick who had previously been a very successful entrepreneur and impressed him to come on board. Together, the duo has been working on the project for over three and half years, while juggling full-time jobs and families. Initially conceived to reward artists, FanTipper has evolved to find different applications within the hospitality as well as charity spaces. Nick refers to project owners on their platform as ‘creators’ and explains, “They are all doing something creative, whether making an excellent cup of coffee or raising funds to repair houses for families in Nepal!”
FanTipper’s place within the crowdfunding landscape
When FanTipper was first conceived, large crowdfunding platforms such as Kickstarter and Pozible were still relatively unknown, and the founders believe that the subsequent growth in their popularity has helped people better understand and adopt the FanTipper concept of cashless tips to creators.
Nick explains FanTipper’s unique value proposition, “When we started, companies like Kickstarter were all about the future, there was really no one who was looking at rewarding people who are doing amazing things right now. That is the space where we believe the real value lies.”
Ash and Nick are confident of securing this niche of enhancing the concept of gratuity through digital technology. Within the hospitality space, digital tips from a loyal fanbase can be more powerful than reviews as positive endorsements for local businesses. This effect is further amplified as fans have been pushing up to 60% of their tips into social media and along with location, which can help other users find the most loved local food places. Nick adds, “Facebook has likes, Youtube has views, and FanTipper has ‘Fantips’.”
Local venues on relatively small advertising budgets can also leverage the app to grow long-term connections with their loyal fans by sending them special offers and discounts.
Evolution of FanTipper’s digital platform
After meticulously refining the initial proposal, the founders partnered with Melbourne-based design studio South South West to create the branding and web design. Further help came from a developer who built the platform and an outsourced contractor who created the mobile app. The payment is processed via a secure third party provider Pin Payments and is directly paid to the venue.
In the past two years, the team has created a series of Minimum Viable Products (MVPs) and are in the process of gathering as much data as possible from within the hospitality and charity spaces. Ash explains, “At this stage, we are doing an invite-only beta launch and inviting creators who might find a benefit by using the platform.”
FanTipper’s current version is based around tipping the venue or business rather than individual members. However, while doing the initial tests with the MVP they made a different observation, “We found that people want to have a one-on-one human connection with the individual who served them and they want to tip the individual.” Ash also envisages that the motivation to join FanTipper will come from individual staff who would like to be rewarded for their hard work and would be instrumental in helping to get venues onboard.
Therefore Version 2.0 of the application will be entirely based on tipping the individual waiter, barista or band member. Operationally, each venue will have a tip administrator with the discretion on how to distribute the tips amongst their teams and whether to allocate a certain portion to charity.
Completely bootstrapped till now, the founders believe that once they have reached a critical number of downloads and data gathering in the coming months, they will be ready to look for external funding with the right partners for scaling to the next level.
Challenges of FanTipper into the future
As a startup trying to grow and create a uniquely digital offering within an industry which still values its time honoured traditions and is very much face-to-face, the founders have had to tackle the challenge of growing traction from creators. Nick explains their approach, “You have got to approach them in an old-fashioned way, and educate them about the new ways of doing things. Once they get it, they are all for it. However, the initial gap is a lot of work.”
Nevertheless, Ash and Nick are very driven and have an infectious enthusiasm that is helping to build a community around their idea. Operating within Melbourne’s vibrant and growing startup community that is co-located around the city’s many beautiful cafes and pubs, FanTipper is on a very fertile ground with lots of opportunities to grow locally and prove their model.