Tapshare turns Halloween photos into a contest where users can win equity
Halloween. It's the one day a year where a person can dress as Captain America, a wizard, or the lamp from "A Christmas Story" and blend in. Children get candy and cavities; parents get to spend the night "inspecting" their kids' hauls; and young, childless adults like myself get to stay inside and hope that no one else pounds on the door demanding saccharine treats.
Tapshare, a photosharing app reminiscent of Color (before the pivots and downfall), is offering Trick-or-Treaters something else tonight: equity. Whoever creates the photo album with the most contributors will be awarded 1,000 shares...of Tapshare.
Essentially, Tapshare makes it easier to create publicly-editable albums around a topic of your choosing. (There is an option that makes it possible to hold stricter control over an album, but that doesn't seem to be the core aspect of the service.) Albums can be shared to Twitter and Facebook or saved to the device's Camera Roll, and users can connect their Facebook accounts to automatically fill out their profiles.
After spending a few minutes with the app, it seems like it's a fine service that some people may enjoy using. Unfortunately, I also (briefly) thought the same thing about the original Color app, which mashed photos from anyone in the same vicinity together. Tapshare offers more control than that, but I'd still be wary about posting a photo album that other users can edit to any service, let alone a young, unproven one.
I asked Tapshare cofounder Myke Armstrong why the company decided to hand out equity instead of candy. "We are excited to be able to give away equity to our power users," says Armstrong, "which we hope makes them even more excited about Tapshare." This seems logical: People that already use Tapshare might be even more tempted to use the service if they have a direct financial stake in its success.
This being the first time I've heard of a startup giving equity away as part of a promotional contest, I wasn't quite sure whether this move was brilliant and likely to be imitated or something that other founders would reject. To get a bit more perspective I reached out to David Politis and Aaron Klein, the CEOs of BetterCloud and Riskalyze, respectively, to get their opinions.
"Never. I'd give away product, I'd give away swag, I might even give away cash…but I'd never give away equity in my company," Klein says. Politis, though he isn't quite so passionate in his response, says that he probably wouldn't do something like this either.
Klein focuses on the effect that giving equity away could have on his company, saying "First, you only get 100 points, and it's all but impossible to ever get them back. Second, if I'm worth my salt as an entrepreneur, that equity is worth somewhere between 50 to 200 times what it's priced at right now. So if I'm giving it up, I have to get that much value back in return."
Politis, on the other hand, thinks about the issue from a user's point of view. Besides the fact that most of the population won't hear about the contest via a press release, he says, "I think most would understand there is a pretty good chance that equity in a consumer tech startup won't be worth anything, and basically it is a contest where you win $0 for doing something, and IF there is a chance that it is worth something, it probably won't be for a long time"
Two other founders, then, would rather give away a product (Politis says, "I think with this kind of app if you offered free iPhone 5s to the top four or five people who created albums, you'd probably get a much higher response rate") than a chunk of equity.
Other entrepreneurs, though they haven't commented directly on this story, express the importance of holding onto equity as well. A recurring theme during our PandoMonthly events has been, "Be careful about who you bring into your company." Hell, Thrillist CEO (and PandoDaily investor) Ben Lerer doesn't even hand equity out to employees until they earn it. Equity, whether you're a huge company or a small one, matters.
For his part, Armstrong seems confident that this is the right move for Tapshare. "Whoever creates a photo album and has the most friends add a photo, we will happily welcome to the Tapshare family. Our power users are incredibly important to us and right now are helping shape each update that is released," he says. And, when I ask about it effecting the seed round that the company plans on raising, he says, "The investors we've chatted with said it won't effect a seed round."
This got me thinking about what might happen if other startups decided to do something similar for other holidays. I've outlined a few of the possibilities below.
- For Thanksgiving (the day that Americans gather around the dining room table to feast on turkey and familial drama, for those international readers who aren't aware), Pop-Up Pantry could give equity to the household that orders the most dinners. Tagline: "How about a little bit of equity on those mashed potatoes?"
- Then, for Christmas, DropGifts could offer equity to the person that successfully gives and receives the most gifts through the service. Tagline: "Gone are the days of giving a gift, and receiving sweaters or fruitcakes in return. This year, you'll have a little bit of equity waiting for you under the tree."
- Afterwards, to usher in the New Year, Fitocracy could offer a slice of ownership to everyone that signs up for the service and logs the most "This is the year I'm going to get fit" miles on the treadmill. Tagline: "Put down that pizza – the only slice you need is a slice of Fitocracy!"