I have been following Venmo since it launched and I have been talking with co-founders Kortina and Iqram for some time. I got a chance to sit with them down in Austin at SXSW and gave some totally unsolicited ideas.
Venmo at its core lets people send and receive payments via SMS – longer description at the bottom of this post.
Most recently Venmo was featured in NY Magazine and as they try to scale up and gain more users I thought I would share my thoughts here.
One of the most compelling ways to incentivize people to try something new is to reward them. An even better way is to reward those who are evangelizing a product for you. Today, they have experimented with rewarding $1.00 per new person you invite. You can have a fixed reward cost per new user, but what is their lifetime value? What if they do not become an active user on the system?
Que the Venmo Mavens game
My idea is to introduce a random monetary reward that would act as a virtual high five from Venmo. Its like Kortina or Iqram (the founders) saying “Hey, thanks for bringing someone new into the system!”.
By keeping the reward in an unknown state you then have a more engaged maven as they want to know what level they have reached. You also have a new user that wants to know the same information. It might look something like this;
Invite first friend: $0.05 reward
Invite 2: $0.17
Invite 3: $0.25
Invite 4: $0.12
Invite 5: $0.16
On the receiving end the person being invited could get some small bonus too – perhaps $0.02-$0.10 depending on the maven.
As you can infer the alternative cost is $5.00 for 5 new users vs. my method which is $0.70, but the satisfaction is knowing your actions are being “noticed” by Venmo. Thus, a virtual high five of doing a better job. It would all be automated but the psychology is much stronger. Plus, it becomes a game to see what level Venmo Maven you really are.
You never know exactly what the increment will be, but you know you are making progress as its directionally upwards. This would also allow Venmo to track who is successfully adding new “active” users and thus rewarding those who are getting other Mavens in the system.
I am sure they have thought about this, and I am just reiterating my thoughts from SXSW. I think there is something special about having a semi-automatic virtual high five happen with a random reward vs. the $1.00 that can make someone feel special.
For those that do not know, Venmo is a great way to text payments between friends. You can easily pay someone back for a beer or dinner, or split a bill with a roomate – all simply by texting with Venmo. If you hang out with any group and go out often, you probably find yourself in a position of picking up a round of drinks, maybe dinner, or splitting a bill – Venmo gives you a low friction way to text any payment to anyone with a mobile phone. You can then claim and make your account later through a very simple SMS based system and later check your account and activity on the web.