SMI #006: Replace Cash Tipping with Airdrop

Replace Cash, Venmo, and QR codes with location based tipping

Pitch in a Tweet:

Create a frictionless way to reward great service when you have no cash. Despite progress in virtual payments, like Apple Pay, Square, and Venmo, cashless tipping options are still socially awkward and technologically clumsy interactions. Tip using “Airdrop” through Bluetooth.


People are carrying less cash

  • In an average week, roughly 3 in 10 adults said they make zero purchases using cash, lessening the probability of having cash on hand when it’s appropriate to tip

  • How many times have you wanted to tip the bellhop or the pool attendant on vacation but nervously patted your pockets to realize you had no cash?

  • Trips to the barber and nail salon are places where cash tips are common; I’ve had a plethora of panic attacks at the end of my haircut (read: gettin my nails did)

    • Takeaway: Not having cash is not the same thing as not wanting to tip (the rare triple not)

Venmo is too personal of a transaction

  • To pay someone with Venmo who’s not in your contacts, you need to awkwardly ask them if they have Venmo; if they do, you have to fat finger in their username (i.e., “Skatergurl8”); if they don’t you have to ask if they believe in God

  • This product would use Bluetooth to detect potential tip recipients in the area; they’d have a simple profile with their first name and headshot for recognition

    • Takeaway: Waiters and bartenders get pretty annoyed when you ask if they have Venmo and so does Lisa behind you who wants a Mojito

Apple Pay is built to replace credit card transactions with merchants, not workers

  • Apple Pay does not have a great use case for tipping and requires a payment gateway and merchant of record to complete the transaction

  • This product would be more analogous to a pre-funded wallet with airdrop

    • Takeaway: Service workers do not want to set up an LLC or Corporation to accept digital tips

If it wasn’t for COVID, QR codes would be dead

  • QR codes are great for paperless restaurant menus, but socially awkward if they are physically on a person

    • Takeaway: Asking the barista to stand still so you can scan the QR code on their apron is not kool

Payment services require wifi or a cellular network connection

  • Bluetooth is great because it requires no wifi and no cell connection. You just need to be physically in the area of someone else. So you could hypothetically tip the cabana boy when you are on the beach in Bali with no cell service

    AirDrop uses an interesting combination of technologies to transfer files securely. It uses Bluetooth to find devices that you can send to, and the device you send from creates a secure peer-to-peer Wi-Fi network connection with the receiving device and transfers the file(s). This transfer does not use the Internet, nor a local Wi-Fi network


    • Takeaway: Drop it like it’s hot

Share Steal My Idea

Back of the Napkin Market Sizing

Kinda Biased Competitive Landscape

Note: The two closest companies to successfully accomplishing this are Tiptapgo and Tipflip; both are contactless, require hardware, and use location services but require a cellular connection at time of tip (not Bluetooth)

How It Makes Money

Waves This Rides

  • Cashless Society:

    • Each generation is carrying less and less cash

  • Mobile First Society:

    • People are more likely to forget their wallet at home than their phone (I have literally no way to prove this but it feels right)

  • Another Way to Avoid Human Interaction:

    • You could tip someone from far away without having to ask for their Venmo, scan their QR Code, or tap their phone; chalk it up as a W for people who don’t like talking to people

Future Expansion Areas

  • Restaurant servers

  • Food delivery persons

  • Bartenders

  • Bellhops

  • Hair dressers

  • Taxi Drivers

  • Golf Caddies

  • Baristas

  • Tour guides

  • Tailors

Why This Might Fail

  • Cash is king

    • Money in your wallet NOW is almost always better than money in your virtual wallet now

  • Owners with sticky fingers

    • In some states, as long as workers earn above the minimum wage, owners aren’t legally required to distribute pooled tips; these owners deserve to rot in a perpetual state of Creed

  • The tax man

    • If it got big enough, the IRS could become weary of people using the product as a tax loophole

    • I am not a tax expert (for many of the same reasons I don’t enjoy chewing glass or swallowing saw dust) so it’s unclear to me if the business or individual would be responsible for tax withholdings

  • Collapse of Western Civilization and a return to bartering

    • The ultimate “cashless” society

    • Can I tip you in wheat?

Potentially Reliable Stuff I Read at 3 AM

Completely Irrelevant Post Script No Reputable Business Publication Would Allow

Get Hyped

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“Maps are for tourists, not explorers.”

-Jim McKelvey‏, The Innovation Stack

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