GymPact vs Beeminder

Wednesday, August 1, 2012
By dreeves

Beeminder vs GymPact, Spy vs Spy style

If we were nervous about our competitors — and we’re not — we might be most nervous about GymPact. GymPact is currently an iPhone app (UPDATE: Android as well now) that pays you money for going to the gym, funded by the slackers who failed to get themselves off the couch. But they just raised almost a million dollars of funding and changed their name to Pact, Inc with the intention to expand beyond incentivizing gym usage.

You’re literally betting on your own success and the people who lose fund the people who win.

GymPact’s business model is one we thought we’d try for Beeminder at one point: You’re literally betting on your own success and the people who lose fund the people who win. We shied away from that in part because of the adverse selection problem. The adverse selection, in GymPact’s case, is that gym rats — people who go to the gym every day anyway — will be especially incentivized to sign up. Even worse is that you can make money by cheating. For example, you could hack your iPhone so it reports that you’re living at the gym. Last we checked that was especially easy: you self-report your gym’s location, meaning you could enter the address of your favorite bar. (We’re not suggesting this is a dealbreaker for GymPact’s model.)

We don’t have that problem with Beeminder since your only reward is being awesome and reaching the end of your yellow brick road. (And getting our pretty graphs and bot reminders and data import/export and whatnot for free — I guess that’s nothing to sneeze at!) But that means it has zero appeal to cheaters and weaselers, which is why we’re able to be generous about what counts as a legitimate derailment without it inviting abuse.

Speaking of perverse incentives, we’re often asked about our own. It seems that from the perspective of those paying us, Beeminder is providing a ton of value and a ton of motivation and the occasional cost of derailment is a fair fee for Beeminder’s service. In that sense it’s almost natural that the fee is waived for people who never go off track. Those people evidently didn’t really need Beeminder in the first place.

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  • Caleb

    Interesting article.

    I disagree with you on one thing – Gympact does veto the locations you checkin as a gym. If you checkin to your house, the team will see that and will disregard your location.

  • Steven

    So how is the division between stayers and quitters? If this business model works, does it not mean the burn or burn method does not work, or is not powerfull enough than any other method where the results will move towards a bell curve..?

    Since the stayers can’t earn anything if there are no quitters, you basically depend on the quitters, shouldn’t the real goal be to convert the mass of users to a stayer through this behavioural science?

    The participants might be betting on their own success, but the company is betting on the failure of others it seems… Reminds me of some other practices..

    Correct me if you think I’m approaching it through the wrong angle if there is one..

  • Daniel Reeves

    That’s definitely the most common objection we hear. I think having been around 5 years now is maybe our best counterargument. We’d have to be super myopic to try to make money by causing derailments. Empirically we make the most money from people who are getting the most value out of Beeminder, as you’d expect with any business. I’m not sure how well this analogy works but I think I heard it from a user defending us somewhere: Do you worry that your doctor’s incentives are to keep you as sick as possible so you keep needing their services?

    Anyway, more thoughts about the seeming perversity of our business model here:

    Thanks for asking about it!

  • lifeofmatt

    >Do you worry that your doctor’s incentives are to keep you as sick as possible so you keep needing their services?

    This is a frequent worry with modern medicine and something I do worry about. I think that these incentives have a lot to do with why we focus on treatment instead of prevention.