Gittip takes ‘open source’ to new levels, finds limits

Pittsburgh-based entrepreneur Chad Whitacre is approaching his online cash gift-giving startup with an earnest interpretation of being transparent.

The founder uses volunteer coders as his company’s staff, the code they write is open source, the company’s conversion rates and fraud incidents are published online, and recently he’s started live streaming many of his calls on Google Hangouts, then posting the recording to Youtube afterwards. But that open approach backfired when popular online blog TechCrunch turned him down for an interview, not wanting to engage in the publicly-accessible discussion. Whitacre didn’t spend long licking his wounds, but took to his blog to write about the incident. After seeing that post, took him up on his offer of a publicly-streamed interview.

“I knew it was a risk to ask them to do this open call style thing,” Whitacre says in the video interview, now available to watch on Youtube. “If he’d [the unnamed TechCrunch writer] had come back to me and shown some interest in working out a compromise, I probably would have done that.”

Whitacre has recently started using Google Hangouts as a method to hold online meetings with his programming team. Then he started using the tool for some of his one-on-one calls, but not all of them. For calls with journalists, other entrepreneurs who want to compare notes, or discussions with some company partners, it’s open season, he says.

“Doing calls takes time,” he explains. “There’s a lot more value to me if you want to have a call that’s an hour of my time… if we can put that online, there’s going to be a benefit to that.”

Whether anyone actually watches the calls or not is still left to be seen. No one is watching the calls he’s done so far, Whitacre says, because no one wants to watch a half-hour of raw and unedited interview. So why do it?

“I want it to be the default we’re doing things openly,” he says. “I want this stuff to be on public record.”

Gittip is a different approach to crowdfunding than the project-based, campaign-driven style of KickStarter or Indiegogo. Gittip members use the site to either receive money  from other users, or gift money to other users. Online payments can be completed using a credit card, and manual payouts can be completed using PayPal. The payments are also required to be recurring on a weekly basis rather than a one-time lump sum – so that the recipient can count on that revenue to pay their bills.

Gittip doesn’t take a cut off of the transactions on the site, but is entirely funded through its own platform. Whitacre, for example, receives $251.98 per week on the site for one of the largest hauls among users, and gives $100,91 per week. All of Gittip’s team members are also paid by receiving money on the platform, Whitacre says. Most of the users of Gittip currently are programmers, and mostly coding in Python.

With a donation limit of $24 per gift, users would count on gifts from multiple people to be sustainable. People receiving money don’t see the identity of people who are choosing to fund them. That’s one missing aspect of transparency that’s intentional, Whitacre says.

“We set it up that way to avoid the unfriending problem,” he says. “If I need to stop giving you that $1 per week, in introduces that level of friction that we wanted to clear up.”

Gittip posts far more company information online than any typical firm would want to. A quick look at its stats page reveals the user conversion rate (it’s 6.9 per cent, with 806 users out of 11,668 actually having a credit card on file). A fraud page details incidents of fraud that have been perpetrated on Gittip, with the first detailed post accounting for how $567.89 was stolen from users.

Whitacre is certain this type of transparency will help his startup grow and attract more users willing to transact on the platform.

“It’s easy for entities… to squish people if there’s secrecy,” he says. “It’s just part of my personality. For some reason this idea of openness and transparency is really important to me.”

Gittip is working in Canada and other international locations, but automated withdrawals aren’t supporting yet. Gittip is working on the issue, and an open thread on GitHub is documenting progress.

In coming weeks, Gittip will help users discover people they might like to fund by creating communities. When 150 users self-identify as being in a community, it will gain a home page on the site.



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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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