Tipping Software for a Cashless Society

20% EARLY BIRD DISCOUNT

Blind Barrels is CRUSHING it.

Their first product is a whiskey subscription product with and I’m amazed how fast it’s flying off the shelves:

• Y1: $173k - 🥃 

• Y2: $520k - 🥃 🥃 🥃

• Y3: $1.1M - 🥃 🥃 🥃 🥃 🥃 🥃

I’ve come across a few startups with this kind of growth rate, but when you dig into it they’re usually losing hundreds of thousands of dollars and on an unsustainable path.

That is not the case with Blind Barrels, they’ve been profitable since 2023 and are rolling excess profits into growth.

There is still a limited amount of time where you can take advantage of their early bird valuation pricing. Pour a glass and check it out:

TIPPING SOFTWARE FOR THOSE LEFT BEHIND

America is rapidly becoming a cashless society - 48% of Americans make ZERO cash purchases in a typical week.

Speaking from personal experience, I usually keep one large bill in my wallet just in case I come across a place that doesn’t take cash.

Rarely, if ever, will I keep small bills in my wallet.

This shift in consumer behavior has ravaged a select group of service workers. I’m not talking about waiters & bartenders, these workers are still able to get tips through Point-of-Sale devices.

The group of service workers that has been hit hard includes hotel staff, nail techs, masseuses, bands, barber shops, caddies, movers, tour guides, and many more.

In the absence of cash, it becomes more difficult to reward these workers for a job well done - and their income suffers as a result.

This week I talked to Ian Sweeney - he might be the one and only person working on solving this major issue for service workers. It’s a large market to go after - an estimated $80B in tips are impacted by the cashless transition.

An Irishman living in Oakland, California, Sweeney is a bit of a unicorn (unipotato?) himself.

After emigrating to the U.S., he successfully sold his 1st company, and moved into an executive role with the company that acquired him. That company was then acquired by SAP.

From there he joined Trov Inc, and that company was acquired by Travelers Insurance, giving Sweeney 3 exits under his belt.

At that point, why not try and go 4/4? Sweeney founded Bepo, a tipping software meant to benefit service workers left behind in the cashless revolution.

WHAT THE TIPPING SOFTWARE DOES

Bepo’s software seems simple on the outside, but has a treasure trove of benefits once you examine it closer.

Bepo provides service workers with options for being tipped - QR codes, URL link, or tap-to-tip tokens.

When a customer reaches the service worker’s Bepo page, they can tip in whatever payment they prefer - Venmo, Debit/Credit, PayPal, Apple Pay, etc.

Customers also have the option to leave a review and rate their experience. It’s a speedy process and can be completed in under 30 seconds.

WHY SERVICE WORKERS LOVE IT

By giving customers unlimited payment options to tip, service workers can increase the amount of tips they bring in on a monthly basis.

I’ll be fully transparent - when I first came across Bepo I thought it was a dumb idea.

I thought to myself: “Everyone has Venmo, and Venmo is free!”

It may feel like everyone has Venmo, but in reality only 38% of US adults have ever used Venmo.

Rival CashApp has an even lower 26% penetration rate. By only allowing accepting Venmo or CashApp payments, you’re effectively closing yourself off to 2/3 of potential tippers. 

Bepo has the stats to back up this claim - service workers have so far seen a 180% increase when implementing Bepo tipping software.

The workers also don’t need to provide personal information, which is often divulged by Venmo/CashApp.

So there is a clear financial benefit to the service worker, but the businesses who deploy Bepo win big as well.

When I finally wrapped my head around the business side of their software, my mind was blown at how genius this product is.

WHY BUSINESSES LOVE IT

Bepo is good for service workers…but it is GREAT for businesses. Let me explain why.

The workers who have seen tips dry up in a cashless world are often going to their employer, demanding higher pay to offset their compressed income.

As a result, business owners are financially motivated to have their workers earn more tips; more tips = the less they have to pay in wages.

I did some quick calculations on the math involved to prove out the economics of this premise.

Bepo costs $10-$15 per month for each user + 2% of all transactions.

For an average worker making $15/hour working 30 hours a week, the business owner needs to pay them wages of $1,800 in a given month. (=$15 × 30 × 4 weeks)

To add on Bepo, it would cost upwards of $15 for the subscription + 2% of tip transactions. If the average worker is getting $800 in tips each month, the business owner will have to pay $31 to implement Bepo. (=$15 + (2% x $800))

Adding this figure to their wages, the business owner goes from paying them $1,800 → $1,831. This is a 1.7% increase in costs for them to let their employee see a 180% increase in tips.

I’ll say that one more time for it to really sink in - the business owner has an opportunity to increase their workers’ tips by 180%, for just a 1.7% increase in costs.

Now if the business owner does nothing, the employee may think to demand a 10% raise, or a 20% raise. They may even decide to quit. Therefore it make a lot of sense to their bottom line to add in a powerful tipping software that only increases your costs +1.7%.

THERE’S MORE FOR BUSINESSES TO LOVE

Unit economics is one thing working in Bepo’s favor, but there’s a lot more.

Businesses get access to all the reviews + ratings of their employees. This grants them the visibility to see which workers are strong performers, and which are causing problems.

Bepo’s utilizes AI to recognize sentiment within the reviews - all negative reviews are immediately flagged to the business so that they can address before it becomes a negative online review.

In the instance of a positive review, Bepo will prompt the tipper to share their review online.

It’s a great system - businesses get performance data on your employees, can quickly resolve issues, and increase their positive online reviews.

Bepo also makes it extremely easy to accurately report their employees’ tips to the IRS. While there may be a minority of business owners that wish to under-report tips, a good amount will appreciate this feature.

HOW BEPO IS PRIMED FOR ORGANIC GROWTH

Bepo is currently on a sharp trajectory upward - they’ve scaled to 1,200 workers across dozens of professions. The number of tips flowing in depicts steady, accelerating growth.

What’s encouraging is that Bepo has done little on marketing to get these users because their pitch is so compelling. As a service worker, why would you not take a chance on software that could increase your tips by 180%?

Sweeney mentioned a stat that stuck with me and illustrated just how easy it will be for Bepo to sustain rapid growth:

Now, let’s think this through. If Bepo does what they claim (drive higher tips), service workers are going to love the tipping software.

When they go to switch jobs, it’s highly conceivable that they advocate for Bepo to be used at their next workplace. As a result, I see this taking off as the workers themselves turn into brand ambassadors.

TIPPING SOFTWARE IS JUST THE BEGINNING

Bepo is a tipping software today, but could be so much more in the future.

Sweeney pointed out that white-collar workers predominantly use LinkedIn, and it’s helpful for vetting candidates. You can see where they’ve worked, skills their network has endorsed, and the reviews people have left for them.

But if you’re a bartender that’s moved cities and is looking for a new job, it’s not as simple to prove your experience/skills.

But let’s just say you had a software….full of positive customer reviews….that also can prove your prior work history… bingo.

Bepo can reach a point where they become a proxy for a resume, a way to lend credibility to your craft. And if Bepo can get to this point, it’s game over.

LinkedIn was bought by Microsoft for $26.2B way back in 2016. No company has even come close to disrupting LinkedIn - it’s one of the stickiest businesses of our generations.

The point I’m trying to make here is that Bepo would have incredible stickiness if it can achieve this with service workers. It’d practically be woven into the fabric of the industry, impossible to rip out.

Really exciting to think about when you imagine that this is within reach.

BEPO IS NOT WITHOUT RISKS

As someone who began approaching this with skepticism, I’m well aware of some of the risks. There’s certainly some valid ones:

• Apps like TaskRabbit are expanding rapidly in the services field and have tipping natively integrated in their apps.

• Other payment options are available for free (Venmo/CashApp) and provide competing usability

• Laying out all the facts, I can see the business case for implementing Bepo. However, business owners may not see the whole picture and only view it as an unnecessary cost

• There’s a growing tipping backlash movement as some merchants abuse customers - there’s a (small) chance lawmakers could step in with legislation that harms Bepo’s offering

While these are valid risks, I’m ultimately comfortable taking these on.

WILL I INVEST IN BEPO’S TIPPING SOFTWARE?

Yes - 100%. This startup has so much that I look for in a company.

• Benefits all related parties: customers, workers, business

• Natural organic growth spurred by workers turning into brand ambassadors

• Lean team: Sweeney has one other full-time employee and a few contractors

• Attractive business model given low company costs

• Strong moat possible if they can scale adequately

• ….and lots more that I won’t bore you with :)

This is by no means investment advice, but if you would also like to check out Bepo’s fundraising page, I’ve linked it below!