Understanding why Tsu, the Social Media Platform Rewarding Good Content, Collapsed

No big surprise here: Tsu, a social network that worked around the App Store’s rules on pay-per-installs, incentivized its users to create content, rewarded people for signing up friends, and got banned from Facebook for spamming, has now shut down. Yes, “pay you to post” and “pay you to friend” turns out to be an unsustainable business model, after all. According to a message on the Tsu website, the company claims it failed to raise an additional round of funding to keep its social network alive.

You may remember Tsu as the network that made a big stink about getting booted off of Facebook, at the time claiming it was the unjust victim of censorship. In reality, Tsu was spamming. Tsu had violated Facebook’s Platform Policy that forbids developers from incentivizing content because it “encourages spammy sharing and a bad experience” for Facebook users, the company told Wired last year in response to Tsu’s ban.

Despite the startup’s decision to go the incentivized route, the company claimed in 2015 to have 2 million users. With the shutdown this month, Tsu says it had seen 5.2 million users on its platform. However, according to data from mobile intelligence firm Sensor Tower, Tsu only had 1.5 million downloads worldwide across both iOS and Android. That’s not active users, but app installs.

The service was also available via the web, but it never reached the mainstream. In fact, the only people who seemed interested in Tsu were social media marketers and the SEO/SEM crowd.

Tsu was a problematic social network, if there ever was one. Its payment scheme was a bit like multi-level marketing – users were paid based on the engagement with the content they shared on the network, and how many other new users they recruited. Tsu’s plan was to keep 10 percent of the total ad revenue for itself, while half the remainder went to users and the other half to the network that brought the content creator to the platform. This encouraged Tsu users to grow their networks in order to make more money.

The company marketed this via an altruistic-sounding vision about how a social network’s users should be compensated, given that they’re providing the content that brings the ad dollars in the first place.

The truth is, social networking users are already compensated – platforms like Facebook, Twitter and Snapchat are available for free, offering ways to connect with friends and family over great distances, engage in conversations, share media, message privately, and more. Yes, it’s in exchange for seeing targeted ads, but that’s a deal that over a billion users are willing to take.

Tsu users, meanwhile, didn’t come because they cared about connecting – they came for the money. That never ends well.

Tsu monetized through ads around its content. Last year, ads from Twitter, Lyft, Taco Bell, Pandora, and others were spotted on its service.

According to a message posted on Tsu’s site, the social network is now gone for good. And we’re fine with that.

“…We have permanently taken the tsu product offline due to the cost associated with running it and our inability to complete the last funding round,” writes Tsu’s founder Sebastian Sobczak. “We are now focused on retooling in order to launch alternative apps for our community and others.”

The company claims it will still pay out to users whose accounts have amounts large enough for redemption ($100) if those users reach out via email by the end of the month.

Source: TechCrunch -

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