Wednesday, February 13, 2013

Wagers, Motivation and Public Humiliation

When I worked at a small agency in Boston, I found myself hanging out in a bar with a friend and colleague, getting a bit tipsy as we talked shop and played Golden Tee. Everything was pretty casual until we decided it would be fun to bet over the result. Eventually, we hit upon a unique wager: the loser would have to go up to our boss during a meeting, inhale deeply, and exclaim, "Wow, Jack, you smell AMAZING!" Suddenly the game took on a manic intensity: the stakes had focused our inebriated brains.

I bring this up, first, to embarrass the person who lost the bet and then backed out of doing it, and second to note the power of a wager to raise the stakes in any activity. If someone asks me whether I could run a 5k, I'd shrug my shoulders because I really could care less. But if someone bets me $100 that I couldn't finish one, I'm going to hit the road and be out training tomorrow. It isn't that I really, really need that money, but that I really, really like to win.

It is that insight, that people's desire to win (or to see their friends humiliated) that is driving a new approach from everything from weight loss to fundraising. And we are very creative about the types of wagers that we make. One interesting way to set up the competitive dynamic is actually to bet on yourself, and make that bet public. That's essentially what is doing: they pioneered the idea of a commitment contract. Here's how it works: you set a goal, for example to lose twenty pounds or run a marathon., and you set up a contractual penalty if you fail to reach the goal. One common approach is to donate some money to a charity you dislike, like an avid meat-eater sending $100 to PETA. The donation is placed on hold, and only made if you fail to reach your goal. Then you set up a referee who validates that you accomplished the challenge, and you can invite friends and family to watch your progress. 

How successful is it? According to Ogilvy PR's site: " is doing well in helping people achieve their goals. For people who use the website to set and achieve weight loss goals, for example, there is a reported 85%-90% achievement rate." If validated, that is a far higher rate than programs like Weight Watchers and even prescription weight loss aids. It proves that people don't like losing money, but also that they don't want to be seen as losers once they've made the public bet with themselves.

More recently, a site called has taken this idea and applied it to fundraising. The mechanism is a little different than Stickk: here, users raise money by being willing to take on absurd challenges. As explains:
Would you take a shower in a public fountain? What if your friends would donate $50 if you did it? A just-hatched startup called Moolta wants you to challenge your friends to do wildly crazy things, record their antics and post them to their platform. What’s in it for the dare accepters? The dare is a fundraiser — in most cases for charity.
The interesting thing about this model is that the donors are essentially paying to "win" a bet, but the daredevil who does (and records!) the act is really winning by proving his commitment to a cause and his personal fearlessness in public. And when you think about our social media-driven world, people are trying hard to be seen as creative, fearless and unconventional all the time. Moolta has combined a clever way of raising money for charity with a novel opportunity to create viral content.

Clearly, wagers and humiliation are motivating in at least two ways: in the Stickk model, avoiding humiliation and loss is meant to drive desired behavior change. In Moolta's approach, people can bet on their friends' willingness to humiliate themselves for charity, and those friends are liberated to act ridiculously by the fact that they're doing it for a good cause. We love betting on and against each other so much that there is plenty of room for both to thrive.

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