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The TinyPass team, based in Seattle and NYC, chats via Skype. They are, from left to right: Tim Dirrenberger, David Restrepo, Kirill Kouterguine and Will Coghlan.

In an opinion piece for Bloomberg this week, former Microsoft Chief Technology Officer Nathan Myhrvold lamented the demise of the physical newspaper and wondered if the solution might be in a payment system for news content.

That message certainly will resonate with TinyPass, a 12-month-old startup that’s created a new way for news organizations to make money without erecting pesky paywalls. A few online publishers, including Seattleite and DJ Booth, are already giving it a shot.

We caught up with TinyPass co-founder Will Coghlan, who relocated to Seattle 10 months ago and is currently based out of the Founder’s Co-op offices in South Lake Union, to find out more about how they plan to help publishers cash in on their content.

Explain what you do so our parents can understand it: “TinyPass makes it easy for anyone to charge for access to their online content.”

Inspiration hit us when: “We learned that The New York Times reportedly spent $25 million to build their very basic, very leaky paywall. We knew we could build a better toolset that any publisher, large or small, could use to set up a smarter paid-content plan with no upfront cost. It’s no secret that ads alone just don’t pay the bills for most digital media publishers, so paid-content is really the only alternative.”

VC, Angel or Bootstrap: “Angel. TinyPass closed a significant — more than $500,000 angel round — in the Fall of 2011, and will be seeking a Series A round in the spring of 2012.”

Our ‘secret sauce’ is: “1) A startup with a real business model and real revenue from the very first user. 2) Technology that offers both convenience and measurable cost-saving to our clients. 3) A product that is better for both our publisher partners and their audience. TinyPass isn’t just a publisher-friendly API, it’s also the easiest way for anyone to pay for access to online content, whether you’re talking about a $1 day-pass to a news site, a $4.99 album download, or a $200 bundle of industry reports.”

The smartest move we’ve made so far: “Moving quickly to stay ahead of the curve. We believe that the market for paid digital content, with music, apps, and virtual goods representing the initial wave, is gaining traction and that there is an opportunity for media companies to begin to experiment with paid content models as a way to supplement their digital advertising revenues. In five years, the idea of paying for content on the web will be commonplace. That means there will be much more competition among service providers in this space. But right now, most online publishers are still only dipping a pinky toe into the paid-content space. The results of the paid content movement so far have been almost universally positive, so it’s an industry ready for explosive growth.”

The biggest mistake we’ve made so far: “At first we had a tendency to build features that performed really well but didn’t look as good as they should. Over the past few months we’ve made lots of consumer-facing improvements and TinyPass now looks as good as it performs.”

Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner: “Bezos. He understands the value of digital content, he’s constantly innovating, he’s relentlessly competitive, and he doesn’t give anything away for free.”

Our world domination strategy starts when: “Publishers realize that not only is our platform feature rich and easy to use, it’s also purpose-built to minimize the fees they’re charged by online payment processors like PayPal. Not only does TinyPass eliminate the heavy-lifting involved with setting up a paid-content plan, we actually save publishers money when they use our platform.”

Rivals should fear us because: “We put our clients and their customers first, always. Every feature we build starts with the questions, “How does this make life easier for our clients,” and “How does this make transactions more seamless for their audience.”

We are truly unique because: “We’re the only paid-content platform that offers publishers the ability to charge for access in whatever way makes sense for their unique content and their unique audience. Whether you have a WordPress blog with a niche following, or a news site with millions of readers, you can use TinyPass to charge for access to your content in whatever way you think will work best.”

The biggest hurdle we’ve overcome is: “Convincing publishers that there are alternatives to a traditional paywall. We’ve learned that publishers will get more overall value from their digital media if they’re more creative with their approach to paid-content, but many think their only option is a paywall that locks everyone out unless they’re willing to pay a high price on a recurring basis.”

What’s the one piece of advice you’d give to other entrepreneurs just starting out: “Pain is the biggest motivating factor when it comes to adopting new technologies. For our clients, it’s the pain of decreasing advertising revenue, and the hassle and expense of building and implementing their own paid-content plan. So find some pain, build a clever way to make it go away, and you can’t lose.”

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