Tsu is not a scam or a pyramid scheme

Recently Jon Dunn on Tsu pointed out that some Google searches implied that Tsu was a bit dodgy.

I think the other results relate to Texas Southern University.

The definition of a pyramid scheme is that you use money paid in by some people to pay others, so that it will eventually collapse when people realise they will never get paid. It's a scam rather than a business.

I think this idea is due to a misunderstanding of how the Tsu algorithm works. It's true that people get paid based on what those they recruit make, but none of them needs to pay in any money. All the revenue comes from the advertising on the site and in the app (available on Android and iOS). The company is taking 10% to cover their costs, but still has some way to go before they are profitable.

The fact is that people are getting paid just about every day. Some of them post pictures of the cheques they have received to encourage others. The biggest I've seen is this one by songwriter Andrew Fromm.

He's by no means a typical user as his contacts in the music industry means he could recruit people who can easily grow a large network. He has 29,000 followers himself, so he can earn many dollars a week from his own views regardless. I know of many other people who have had hundreds of dollars from Tsu over the eight months since it started.

Personally I've made about $40 and I've given about half of that to charities on the service. There are about forty of those now and they seem to be doing well. The recent Tsu Madness event raised over $1000 that went to a wildlife charity. There are various events such as #FiveCentFriday that encourage regular giving. You can give as little as one cent, so just about anyone can donate.

It's still going to take me a while to get to $100 (threshold for a payout), but before then I may use some of my funds to buy some art from an artist on there. I've said before that the Tsu market has great potential and it seems to be taking off. It just needs a few more features to make life easier for those selling goods and services. The site is still evolving as they find their way.

The fly in the ointment is the fact that Tsu is not growing so fast of late. They have reached around four million users, but public statistics seem to indicate that fewer than 1 in 40 is visiting daily. I know a lot of my child accounts are dormant. Somehow they need to keep people engaged and actively recruiting. I think that some of the newcomers do not understand that they stand to benefit from getting their friends to join up and use the site. There is still massive growth potential, so it will be a long time before new users stand no chance of building a network. I've written about that too.

I'll keep using Tsu because it's fun. There are nice, friendly people there and we have a laugh. If I make a little extra money, then that's a bonus. As always, you can find me at http://www.tsu.co/steevc

The Tsu Economy

A lot of the focus on Tsu has been on making money. Various other web sites have played around with this concept, but often in some made-up currency. Tsu uses US dollars, so you know exactly how much it is worth.

One of the issues for most people is that you can only take that money (via cheque or Paypal) when you reach $100 and that may take years. However, you can do other things with that money.

Firstly you can give some to other users. Any user can enable the Transfer Funds button on their profile page. I believe Tsu take 3% of such transfers.

The other option is to donate money to charity. There are a number of charities on Tsu. There have been various donation campaigns that have resulted in some of them getting hundreds of dollars. Of course the charities also earn money from their views and network like anyone else.

There's a list of charity accounts here.

A limitation of donations and transfers is that you cannot send less than a dollar, although some people seem to be able to send smaller amounts. I think there is some potential for small amounts to be used a 'tips', e.g. if you like a picture by an artist or a song by a band you can give them a few cents as you would to a busker or pavement artist. In the Bitcoin world there are sites like ChangeTip that do this.

There are a fair few musicians and artists on Tsu. Some offer the option to buy their work by transferring Tsu funds. As this is money you would not have otherwise it's almost like getting free stuff. Of course you still need to earn enough, but I expect they would all accept other payment methods. It's just that a Tsu transfer is very simple and has a fairly low transaction fee.

I have bought lots of music from bands via Bandcamp as that gets most of the money to the artist. Tsu could be encouraging a similar thing. I think they could go further in allowing artists to register themselves for extra features to allow them to manage orders more easily. e.g. providing a form to fill in order details such as the delivery address.

Tsu make a big thing of wanting to encourage original content. They can help this by supporting the artists better than other sites.

If you are not already on Tsu then please consider joining using my link at http://www.tsu.co/steevc

What is Tsu?

Tsu (or tsū to use the official spelling) is a social network site with some similarities to sites like Twitter, Facebook and Google+. The big difference is that Tsu shares the revenue they get from advertising with their users.

Tsu take 10% of the money to pay for running the site. The remaining 90% is shared amongst the users according to their algorithm. It works according to the views a user's posts get, with some adjustments to take account of comments and like. If it's decided that my post earned a dollar then I gets 45c. The rest is passed on to the people who recruited users. The person who recruited me gets some money and so does the person who recruited them gets a little less and so on. This is the network effect.

So the way to make money is to get lots of views by getting lots of people to follow you and/or to recruit lots of people who write popular posts.

Some people assume that Tsu is a multi-level marketing scam (aka pyramid scheme), but I do not consider it to be one as nobody has to pay anything to use it. All you commit is your time. The advertisers are the only ones paying.

The average person is unlikely to get rich on Tsu, but you can make a little extra money doing what you would anyway. The top people with many thousands of followers are making anything from a few dollars to hundreds of dollars per day. Those who got in really early and built a massive network are probably making the most, especially if they recruited celebrities who would have a large following. I make a few cents per day after building a network of several hundred and have a similar number of followers, but then my network is not particularly active. I post a few times each day and participate in any discussions that interest me. The money is not enough to keep me coming back, so it has to be fun.

A lot of people joined up in the hope of making money and were disappointed when they did not do so immediately. To start with I was making a cent every few days, but that has improved. It takes time and effort to build a following. Some people followed and befriended everyone in sight, but I wanted to make my feed manageable, so I only follow interesting people.

Some people are posting things like pretty pictures and 'inspirational' quotes in a quest for views. This may work, but there could be issues if they do not have the right to post those. Tsu have said they are working on ways to detect copyright violation and those people may find that they do not get paid. Those same people will also like every post they see or post meaningless comments (e.g. 'nice') in the hope that people will follow them, but that doesn't work with me.

You have to earn $100 before you can be paid. Many people have been sent cheques and in the early days they would post pictures as proof. There is also an option to be paid via Paypal. Even if you have not reached the threshold you can donate to the various charities on Tsu or send money to another user. People are offering goods and services that can be paid for that way.

Tsu is by no means perfect. These are some of the things I think could be improved:

• You can only view the site once you have registered and logged in. I think that public posts should be viewable by anyone on the web. This would include search engines and it would allow people to check it out before joining as well as giving lots more views.
• The only privacy levels are Public and Friends Only. Other sites offer more options.
• There should be ways to group people (lists/circles/whatever) so that you can filter the feed.
• Tsu needs some ways to keep new users engaged. It could offer tips and make better suggestions for people to follow. Currently you can just see a list of verified users and I've not heard of many of them and some are not active.
• Related to the above, the site views are decreasing, despite new people joining. They need some mix of marketing and exclusive content to build the site.
• Tsu needs ways to automate posting so that people who syndicate their content across multiple social networks can post there without extra effort. You can make Tsu posts appear on your Facebook and Twitter feeds, but many people will use something else as their main feed. IFTTT integration would help.
• The site needs to be multi-lingual. People are joining from all over the world and posting in all languages. Some of them may not understand how it works if the FAQ is not available in their native language.

If you want to join you need a link from an existing member. I would be grateful of you could use mine to help me build my network. The link you need is http://www.tsu.co/steevc