Tophatter (A.K.A. Blippy 2.0) Gathers a Lively Crowd for Live Auctions
There was a time when everyone in Silicon Valley seemed to be talking about a crazy startup called Blippy, which promised that the next step in radical openness would be socially sharing credit card streams of everything that people bought.
Fast-forward to three years later, and nobody is talking about Blippy. Really, nobody. But the startup behind Blippy, which had raised $13 million on the back of that hype, is still going strong.
Palo Alto, Calif.-based Tophatter hosts round-the-clock live auctions for jewelry and craft supplies (like you might find on Etsy), plus other things like designer goods and electronics.
Shoppers join each other live in cutesy cartoon auction rooms, where their avatars face a virtual auctioneer and bid on products, talk to sellers directly, and congratulate each other on winning deals.
They generally tend to be women, and they generally tend to be exceedingly nice to each other. It’s all very strange, considering that this is the Internet.
And Tophatter seems to be working with its early audience — at any given time I’ve checked, day or night, there have been hundreds people participating online.
According to co-founder Ashvin Kumar, the site now has more than $1 million dollars in monthly gross transaction volume.
Kumar added that Tophatter seems to be particularly sticky and engaging. He said the average buyer in March attended auctions on 10 different days, and 35 percent of first-time buyers bought three items in their first month.
Kumar described the site as “It’s like eBay meets World of Warcraft. Or, you could say it’s like HSN or QVC for the social Web.”
Tophatter — using that funding from investors including Charles River Ventures and August Capital – has been quietly in testing for more than a year. During that time, the company has learned to manage supply and demand to ensure that sellers or buyers feel they are getting a fair price for enough inventory.
“If we squeeze the supply, the prices get ridiculous and it incents fraud,” Kumar said. “If we have too many products, they all get washed out. We’ve found we can control pricing 10 percent up or down just by the number of items.”
But Tophatter is more about the social than the commerce, Kumar added. All that engagement comes from the site’s community atmosphere. Tophatter tells sellers not to think of the site as a major source of income, but rather to use it as marketing for their online stores.
This week, Tophatter will add its first mobile app, aimed at helping people spend even more time tuning in for auctions.
The iOS-only app is surprisingly absorbing. Last night, I watched a crowd of women bid back and forth over a ring I had no interest in buying. I was amazed by the intense interest, and also all the positive encouragement from others in the virtual room.
And that’s the point, according to Kumar. “Most people feel Blippy failed because people didn’t want to share purchases. That’s not true,” he said. “The reason it didn’t work is because we had a retention problem. With Tophatter, we have been super focused on making every day interesting enough to come back.”