GymPact vs Beeminder
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.