Speaker: Jared Harding, Head of Product, Sweatcoin
Jared Harding: I’m going to kick things off with a quick question. Who has Sweatcoin currently or, at some point, downloaded it on their phone? There are a few hands.
That was the result I was hoping for. I’ll explain later why that’s the case. Kicking things off with who we are. So we’re a gamified pedometer app leveraging behavioral science to overcome physical inactivity. I’m sure we’ve all at some point procrastinated doing exercise. We’re trying to use behavioral science to persuade people to exercise now. So, we convert your steps into value to motivate you to walk more.
So, how do we do that?
First of all, we track your steps, and then we convert them into a currency, which is called Sweatcoins. Then you can go and spend those Sweatcoins in our marketplace.
You can purchase offers without affiliate partners or donate to charities. Our goal is to make walking rewarding in every sense of the word. Since our launch in 2015, we’ve had 120 million registrations, tracked 30 trillion steps, and converted them into Sweatcoins.
The reason I asked the question at the beginning and why I got the result I wanted, which was not many hands, is probably that number of 120 million is quite surprising, given that only a couple of people raised their hands in the audience. That’s a testament to the fact that our acquisition growth engine works as we want it to because most of you in the audience are too affluent to download Sweatcoin.
You are not our target audience. The fact that not many of you installed it indicates that our growth engine is working as we want. So this is our annual acquisition since launch. As you can see, we went through an initial growth curve, our first hockey stick. Then we saw a big decline, and then we saw another hockey stick. What might have happened at the beginning of 2019 that caused this decline here?
That’s when I joined Sweatcoin. So, it took a couple of years to work out what was going wrong, and then we finally worked it out. Covid didn’t help in 2020 when it continued to go down, but in 2021 and 2022, we saw our second hockey stick. So what I’d like to share with you guys today is a chronology of our story; how we’ve built our growth engine. It’s a retrospective story.
In hindsight, everything makes sense. At the time, we didn’t know what was going on. Now we think we understand what’s happening and hopefully won’t see another decline.
Jared Harding: So 2016 to 2021, I’ve classed this as our learning phase. It took us five to six years to understand and fine-tune our growth engine. It took many experiments. Many of them failed. It required plenty of luck for us to work out what was working for us. So that leads to 2022. Looking at some numbers we’ve achieved this year, we achieved 66 million registrations in 2022.
The most amazing thing about that is that 40 million of those cost us absolutely nothing. Our average cost per in-store across all of those was just 10 cents. That made us the most downloaded health and fitness app in 2022. We’re a high volume, low LTV product. So, if we depend on performance marketing to acquire users, it’s like trying to land a 747 on an aircraft carrier. When you look at it in terms of your CAC and LTV ratios. So we need more than advertising to build a business our size. Hence, we’ve built many product growth tools that have gotten us to these numbers.
These are our four key channels, broken down into the numbers each of those is driving. Our biggest channel is organic. Of those 66 million, 29 million are from organic, which is free; it costs us nothing. Referrals are next, which are mostly free.
Then Ambassadors, primarily micro-influencers, from that we get around 12 million. Finally, advertising is only 4.5 million. That’s the most expensive.
The order of our channels by the number of installs is inverse to how much each is costing us. Let’s go through these, starting with the smallest channel, advertising. 7% of our registrations come from that, and our cost per registration is about a dollar through that channel. It’s a super dependable and easy-to-target channel. Any business, when starting out, goes straight to this because you can start with it immediately.
The issue with advertising is that it is extremely expensive and very time-consuming. We think of paid ads as the ignition for our growth engine. The next is ambassadors or influencers. This is 20% of our registrations, it’s four and a half times cheaper than ads, and it provides users of equal quality.
The key thing we’ve done differently here from many other companies is that we’ve built a proprietary solution for our influencers. When you invite 30 friends on Sweatcoin, you get promoted to become an influencer. Effectively, we are using this to identify people in our audience who may not have monetized their audiences previously. Therefore, it’s underpriced attention, but we can access 100 or 200 installs from those users. What’s exciting about this particular channel is that we can help them build a community on Sweatcoin itself.
We’re not focusing on influencers; we are only acquiring as many users as possible. For us, it’s about acquiring users that stay with us. So we give all different functionality that allows them to engage their audience and drive up our attention of that audience.
The next is referrals. This represents 30% of our registrations, which is 200 times cheaper than ads. It costs us less than a cent per install that we drive through referral. We view this as the core of the growth engine. It’s nearly free, yet it provides our best quality users.
We see 50% higher attention from these users versus advertising. That’s because people installing Sweatcoin have their immediate networks around them. You’ll see this in any product. Your referred traffic is always your best traffic and is likely to share the same characteristics.
This is why we see referrals as the core of our growth. Then finally, organic. This one I don’t understand that well. Only a few people do. I believe many marketers think they understand it, but not many people understand how organic traffic works.
However, this drives 44% of our registrations. The amazing thing about it is that it’s free because we don’t do this through PR work. We do this all through the product first. So the things that are driving this are unattributed referrals. This is like word of mouth, people talking to each other, app store rankings, SEO, brand notoriety, media coverage, and user-generated social media content. One of the speakers mentioned user-generated content earlier, and that’s been huge for us. If you can become the leader in your domain, you can unlock that organic tailwind. You need to find a way to identify customers early in their journey, when they’re searching, for example. If you become the owner of that particular domain, then you can interact with more customers at that point.
Jared Harding: When we launched in Brazil earlier, before we launched, we were still driving 20 or 30,000 in stores per day. Then you’ll see the pink line, April 30th, starts to pick up. That’s our influencers. We went to a bunch of influencers, worked with some influencer agencies, and used it to light the fire. Once we have that, we see the blue line, which is our organic traffic. Then the yellow line, our referred traffic, starts to kick in.
With the yellow line, the more volumes you start driving, you start seeing those multiplier effects with your referral.
Same with organic. After the first few days, we were already ranked the number one health and fitness app on the Brazilian app store; which then started driving organic traffic. After a couple of days, with the number one free app of any category on the Brazilian app store, that drove up further.
What you see at the bottom are our paid ads. This represents a tiny portion; therefore, the amount we had to invest to achieve this is here. On 3rd and 4th May, during the peak, we saw 3.3 million installs on a single day which cost us barely anything. We are trying to piece all of this together and work out the key learnings we’ve learned through that time.
The first is referrals. Referrals act like the core of any growth engine, and you can’t get the flywheel spinning without it. So, it also delivers your best users. I can’t stress this enough for any early-stage company — double down on referrals. Spend all your time building a really core referral engine. You won’t see results from it immediately. It takes many tests. We’ve probably done 30 to 50 tests on different referrals. We have about five or six at any point in time running in the app. So you need to test these.
The second is using incentives creatively. Any good referral mechanism has incentives built into it. You can never rely on just the core product being the thing that drives referrals; incentives drive referrals. You can do that creatively so that you don’t have to spend unnecessarily and say, “Hey, invite a friend, and we’ll pay you five pounds.” Do it with prize draws, competitions, randomizes, or different functionalities with network effects. This means that your cost per install through that channel is tiny. That’s why we see only less than 1 cent per install through our referral channel.
The next is to own as many channels as possible. We own our influencer channels and our referral channels. We’ve built a product for each of those use cases, which ensures that we can have the best quality users.
So for influencers, we can decide what classifiers as a user they are willing to pay for. It needs to be a user that has reached a certain point in the conversion funnel. You can’t do that through paid advertising. The only way to do it through paid advertising is to, instead of looking at CPIs, look at your cost per a certain stage in the funnel, but all that does is increase your expenses. So it’s not effective at all.
Jared Harding: The next is to leverage spikes. This goes back to what we saw in Brazil. Suppose you condense your efforts and effectively engineer a high-intensity targeted growth spike in a certain area. In that case, you can generate tailwinds from organic traffic and get more multiplier effects.
Consider whether you can phase your spend, if you’re using advertising spend or influencer spend at a certain point to light that fire. Then magnify the organic multiplier effect.
The next is org matters. At Sweat Coin, in order to get genuine product-led growth, product and growth teams need to work together. So we have a product growth squad and a growth team. We look at it as the product growth squad building the internal tools that the growth team needs to deliver those. Many organizations have siloed product and growth teams and you don’t get the same effect. The product team spends all their time focused on delivering user experience facing things, not necessarily driving metrics that the growth team is. Therefore, the growth team only has pay channels.
Then the final thing is you need to experiment like crazy. If you don’t have a product team sitting within your growth team, it’s impossible to experiment. You can experiment with content without a product team, but you can’t experiment with the same degree that we’ve been able to do at Sweatcoin.
If there’s one takeaway from these pointers, it is about creating the right organization to achieve this. Thank you.