- I love unconventional business models that aren’t immediately obvious. Because it’s a great opportunity to launch a successful startup before this model becomes obvious to everyone 😉 Here’s a simple example.
- This startup decided to reward people simply for posting on social media. But why on earth would they reward people “just because” for something people already do?
- It turns out, it’s actually a reasonable business model with some well-known counterparts. And here’s how you can capitalize on it by creating a platform that operates on the same principle but in a different niche:
Matera is gearing up to reward people just for writing posts on social media.
To do this, individuals first need to link their social media accounts to the Matera platform so it can automatically track post publications and gather engagement statistics from their readers.
Currently, the platform only supports integration with Twitter (now called X). However, the startup promises swift integrations with Instagram, TikTok, YouTube, and other social networks.
Now, individuals can continue posting as usual without any additional effort – but the platform will automatically award points to the author for each publication. The number of points awarded will depend in part on the number of post views and reader reactions.
Earned points can be exchanged for real money or for perks and bonuses from the startup’s partners.
Technically, points are awarded in the platform’s internal cryptocurrency. However, the same business model can be implemented without any blockchain technology.
The presence of an internal currency allows the author to create a club of their readers who will support them with their currency contributions. In addition to exchanging for perks and bonuses from partners, the author can use the currency for their own promotion on the platform to gain more readers for their posts and more members for their club.
The startup began preparing the platform for launch on April 22 of this year, with the launch itself scheduled for June 1. Despite the platform not yet being launched, Matera has now raised significant initial investments – to the tune of $3.6 million.
What’s Interesting
Today’s Matera immediately reminded me of another startup – Filtroo, which I wrote about in March of this year. Filtroo implemented a “mirror” Matera business model because it decided to reward people who read other people’s posts. And for this, the startup raised 1 million euros in investments in the very first round at the time of launch with just one integration with TikTok.
All other steps are the same – the user must connect their accounts to the Filtroo platform so that it can automatically track the reader’s activity on social networks and award points. And the earned points can also be exchanged for perks and bonuses from the startup’s partners.
Moreover, partners are eager to provide perks in exchange for Filtroo points. The Filtroo catalog already includes 1 million perks from one thousand service partners – among them Adidas, Prada, Fiverr, Vimeo, and Udemy.
A startup called Salt Labs operates on a similar business model but in a completely different market. Salt Labs managed to raise a whopping two rounds of investments totaling $18 million last year.
Salt Labs awards points to temporary employees (builders, workers, couriers, drivers, etc.) for each hour worked. Employers must connect their accounting systems to the Salt Labs platform so it can automatically collect data on hours worked and award points. By the way, points are also awarded in the startup’s internal cryptocurrency. And these points can also be exchanged for perks and bonuses from service partners.
Recently, there has been a noticeable increase in startups with platforms for micro-rewards for temporary and/or low-income employees – workers, craftsmen, waiters, couriers, and so on. Some of them have recently emerged, while others have recently begun to attract significant investments. Among them:
- Protiv (my review) – $2.4 million in investments in the first round,
- Trunk Tools (my review) – $9.9 million in investments in the second round,
- Onaroll (my review) – $20 million in investments, $12 million of which in the last round,
- SocialCrowd (my review) – $2.1 million in investments, $1.6 million of which in the last round,
- Applause (my review) – $10.1 million in investments, $7 million of which in the last round,
- Grata (my review) – $6.3 million in investments, $6 million of which in the last round,
- Edge (my review, when they were still called EyeRate) – $5.9 million in investments, $4 million of which in the last round.
The popularity of such platforms is explained by the fact that these categories of employees really earn very little, but they are in demand in the labor market. Therefore, employers want to retain them and are willing to pay them even more than the usual wage.
Moreover, this additional payment is usually awarded for some demonstrated result – meeting the shift norm, delivering an order on time, completing work ahead of schedule, receiving a positive online review from a client, and similar things. These platforms are structured around the principle of exchanging results for money.
However, Matera, Filtroo, and Salt Labs differ from the platforms listed above in that they award points “just because.” That is, simply for what people do anyway, without being tied to achieving any specific goal – just for posting, just for reading, just for working an hour.
And this is a completely different business model! Although both types of platforms revolve around rewarding mechanics.
Matera, Filtroo, and Salt Labs operate on an “advertising” model. They serve as advertising channels for their partners, who attract or retain new customers through the perks and bonuses offered on the platforms. And these startups earn money at the moment of exchanging the received points for a partner’s perk – you can consider it a kind of payment for a click. Therefore, these startups need to increase the reach of their platforms by any means necessary, which is why they award rewards “just because” for what people already do.
By the way, another startup, Miles, which I wrote about back in 2021, also operates on the same “just because” reward model. It rewards its users simply for moving around the city, and the number of points depends on whether they travel by public transport, bike, walking, or running. They also exchange points for perks and bonuses from partners at the places they pass, run, or ride by. This startup raised $19.9 million in investments.
You can draw an analogy between different reward business models and different content business models. Some businesses earn from advertising within content – so they are forced to write anything just to attract more readers because advertisers pay them based on the number of views or clicks on ads 😉 And some earn from paid subscriptions – so they can only write what people will pay for.
And these are also completely different business models – although both are about creating content. But it’s completely different content created according to completely different principles.
Therefore, by the way, it’s quite difficult to combine these two content business models, although it is usually assumed that authors of paid subscriptions should attract people with free content. However, trying to increase the reach of free content, authors are forced to write anything – and indeed, the reach increases because of it.
But readers attracted by anything the author writes find it difficult to convert and retain on a paid subscription for completely different content – because these people initially came to the author for something else 😉 And in addition, there is also a fundamental difference in psychology between convinced freeloaders, who come in large numbers to free content, and those who are generally willing to pay for content.
Where to Head Next
One could argue that the direction to pursue lies in creating micro-reward platforms. Especially since we see active investments pouring into such platforms lately.
However, these platforms can operate under different business models – either under an “advertising” model (rewards for just doing something with perks exchangeable from partners) or under a “pay for performance” model (money in exchange for achieved results by the employee).
So, these are actually different directions to explore. And each of them has its own pros and cons.
Since today’s review focuses on a startup using the advertising model, let’s delve into that direction.
What are a significant number of people doing right now? Where can we gather information about this? How can we automate the collection of this information? How to structure the logic of point accrual? What “exchange rate” of points for perks and bonuses from partners can be set? Can we somehow link the themes of potential partners with who these people are and what actions we will reward with points? What audience reach would interest different categories of partners? How can we integrate into their existing loyalty programs?
About the Company
Matera
Website: matera.club
Latest Round: $3.6M, 01.05.2024
Total Investments: $3.6M, Rounds: 1