Stickk is a goal-setting platform utilizing 'commitment contracts' to enhance users' success in achieving their goals by leveraging behavioral economics principles such as loss-aversion. The platform offers various steps to create these contracts, including setting stakes, assigning referees, and inviting support from friends. While Stickk demonstrates a viable business model through both B2C and B2B channels, it faces challenges requiring further data analysis and potential adjustments to enhance recurring revenue and maintain customer engagement.

1. Case Analysis:
Making stickK Stick: The Business of Behavioral
Economics
Name: Danh Do
NetID: hw6733
Class: MKTG 6215
Professor: Dr. Yi He

2. 1. Overview:
Created by behavioral economists at Yale, StickK is a goal-setting platform which uses
“commitment contracts” (Figure 1.1.) to help its users achieve their goals based on the psychology
of loss-aversion and accountability - “A Commitment Contract is a binding agreement you sign
with yourself to ensure that you follow through with your intentions.”1. Through its research, a
commitment contract can help a person improve his or her success rate up to 3 times.
Figure 1.1. A screenshot of Commitment Contract (Sample)
There are 4 basic steps for a member to create a commitment contract (Figure 1.2.):
Figure 1.2. Steps to create Commitment Contract
1.1. Select your goals: You first need to state what goals you want to follow. Is it one shot
or ongoing? How long do you plan to achieve it? What type of goals is it? By the time
of report, StickK has a total of 14 goal categories or communities: Career, Diet &
Healthy Eating, Education & Knowledge, Exercise & Fitness, Family & Relationships,
Green Initiatives, Health & Lifestyle, Home Improvement & DIY, Money & Finance,
Personal Relationships, Quit Smoking, Religion & Spirituality, Sports, Hobbies &
Recreation, and Weight Loss.
1.2. Set the stakes (optional): Users now input their financial commitment. They input a
certain amount (min. $5), which they will lose to a party of choice if they fail their
goals. The party of choice can be a friend or foe, a charity or anti-charity organization
– the recipient of stakes. It is optional because you can choose “No money at stake”.

3. However, it is proved that a goal with a monetary incentive will is likely to succeed
triple times a goal without one.
1.3. Get a referee: Referee is one person you elect to monitor your progress towards your
goal. He or she can be your friend, colleague, boss or even an organization. They will
verify your scheduled submitted reports with or without asking for proof. You can also
choose “on your honor” which means you trust yourself to follow your goals. StickK
does not recommend this option to anyone who usually finds himself or herself tempted
to fudge the truth. You cannot change your referee once it is accepted.
1.4. Add friends for Support: These are friends you invite to cheer you on whenever you
achieve a goal or on your progress towards your goals. Both referees and supporters
roles are to keep you accountable for your plan.
Basically, stickK is free; but in order for it to work effectively users are encouraged to
create commitment contracts with monetary involved. You will only be billed when: you report
that you were unsuccessful; or your Referee reports that you were unsuccessful; or you fail to
make a required report by the end of the second day following a required reporting day.2
StickK’s source of revenues comes from a commission off any transactions when users fail
to fulfill their contracts3:
a) for all Commitment Contracts for which the Designated Recipient is a friend or foe,
the greater of $1.00 or the transaction costs actually incurred by stickK in such
transactions;
b) for all Commitment Contracts for which the Designated Recipient is an anti-charity,
50% of all Forfeited Stakesand/or Deducted Stakesplus any electronic processing fees
incurred by stickK
c) for all other contracts, 19.5% of all Forfeited Stakes and/or Deducted Stakes plus any
electronic processing fees incurred by stickK.
Additionally, stickK also offers “enterprise solutions” and they market it as a platform to
“empower employees to achieve measurable outcomes”. A flat startup rate is applied between
$20,000 to $50,000 plus a monthly maintenance fee of $10,000 to $20,000.
2. Problems and Recommended Solutions:
The case raises 2 questions:
Question 1: Does stickK have a viable business model?
To answer this question, we need to separate its 2 customer segmentations and evaluate in
each segments: B2C and B2B.
B2C Model:
StickK is providing a solution to an ongoing problem with people, which is people’s failure
in commitments to their goals. It fills the gaps of people having a goal and achieving a goal. If we
look at New Year’s resolutions, the most frequent goals that a person normally sets, according to
a research by University of Scranton, 41% of Americans frequently makes at least a new resolution
every New Year, and 17% infrequently does so. However, 91% of them claim they are not
successful at achieving what they wished for4.
Another success factor of stikK is that it does not limit itself to any niche (although 80%
of its contracts dealt with weight loss or fitness and health). Based on Figure 2.1., it is an advantage
that stickK could cover more types of resolutions:

4. Figure 2.1. New Year’s Resolution Statistics. Source: https://www.statisticbrain.com/new-years-
resolution-statistics/
stickK is the only player in the market that actually uses a different styles of approaches to
help people achieve their plans: loss aversion (scare of financial loss), regret aversion (regret of
financial loss), people’s bias thinking and optimism of what they can do (through the goal-setting
process) and social norms (using communities, social effects, and roles of supporters and referees).
This was proven through the highly successful concept – “Commitment Contracts”. 32% of
contracts are with stakes and 82.8% of them are successful.
However, in order to fully answer this question, we may need more data from stickK,
especially not in their acquisition plan, but in their retention plan:
 Number of contracts with stake per user: despite a growing user’s database, its revenues
can only grow once users tend to put in more contracts, or simply want to achieve more
goals.
 Number of returning paid users, or simply failed cases: this is to evaluate how willing
the market is to accept it. It was stated in their internal document that almost 82.8% of
its contracts with stakes are success stories; which means its revenue comes from
17.2% of unsuccessful cases.
 Average revenue per stake: Since it is clearly helping people, they need to find a
different method to increase this number. This can come from a monthly challenge or
even a competition between users to increase the total amount per stake; or to sustain a
recurring revenue stream.
B2B Model:
While its B2C model is a freemium model where it offers free services to gain future
transactions5, B2B model is direct sale where it engages customers with product demonstration
and customizations. It is clear that its current enterprise solutions are heavily labor intense,
including sales force, product development, customer service and maintenance team. Although
this model can provide a more stable and predicted revenue stream, it may eventually become non-
scalable when the more revenues they want, the bigger teams they need to grow into, the bigger
operation expenses incur such as management, training, etc. It was already forecast that stickK
needs a new account manager every 6 month.
Due to its labor intensity and high customizations, its enterprise solution cost is currently
marketable to big enterprises only. In this segment, it will face a tough competition from Virgin
Pulse. As of 2016, it already covers 120 of Fortune 500 companies.6. Hence, a larger funding may
be required to go to this market.
However, according to Gallup (Figure 2.2.), the majority of U.S. employees were "not
engaged", and 15.7% were "actively disengaged."7. Therefore, if stickK enterprise solution can
push this number up through its “commitment contracts” concept, they may find a huge potential
market to grow.

5. Figure 2.2. % Engaged employees in US. Source:
http://news.gallup.com/poll/189071/little-change-employee-engagement-january.aspx
Question 2: Should stickK choose B2C or B2B?
B2C B2B
Pros  Proven organic and rapid
acquisition growth
 Minimum labor required to grow
 Minimal product development
required
 Less direct competitors
 Better recurring revenue stream
 High entry barrier due to its high
customization process
Cons  Questionable recurring revenue
stream
 Low entry barriers
 Labor intense which can be
eventually non-scalable
 Maximum product development
required
 Stronger competitors
B2C is the model they should continue right now. However, to improve its questionable
recurring revenue stream, they should have a scheduled or recurring engagement activities /
programs with current database. stickK can also add in features such as reminders or coaching to
its users on how to achieve their goals which can be a premium features for a subscription; because
it is already a great motivation application, it can also become a coaching application using the
same concept. stickK also needs to trademark their Commitment Contracts scheme to raise the
entry barriers.
However, B2B model can be less labor intense if they can shift their segments into medium
enterprise with a lower price. A semi-customization process can be in place to prevent an increase
in cost. Corporation with companies like Slack can also be considered to integrate with their
products. This can be a win-win collaboration.
3. Obstacles to Implementations:
Although its approach of Commitment Contract has been proven to work effectively, its
future is still questionable. How likely its customers are to return to create a new contract whether

6. or not the last one helps? As of now, there are many specific goal-setting applications available
(relating to finance, health, etc.), hence customers can later lean to other alternatives despite a bit
drop in their goal achievement success rates.
References
1. stickK, “About stickK Tour”, https://www.stickk.com/tour, accessed Feb 13, 2018
2. stickK, “Set the Stakes”, https://www.stickk.com, accessed Feb 13, 2018
3. stickK, “Terms and Conditions of Commitment Contract”,
http://www.stickk.com/faq/tac/, accessed Feb 14, 2018
4. Statistics Brain, “New Years Resolution Statistics”, https://www.statisticbrain.com/new-
years-resolution-statistics/, accessed Feb 14, 2018
5. Investopedia, “What are some examples of different types of business models in major
industries?”, https://www.investopedia.com/ask/answers/042715/what-are-some-
examples-different-types-business-models-major-industries.asp, accessed Feb 14, 2018
6. MarketWired, “Virgin Pulse Celebrates Record-breaking Year of Growth, Innovation,
and Global Expansion” (Jan 31, 2017) http://www.marketwired.com/press-release/virgin-
pulse-celebrates-record-breaking-year-growth-innovation-global-expansion-
2192274.htm, accessed Feb 14, 2018
7. Amy Adkins, “Little Change in U.S. Employee Engagement in January” (2016)
http://news.gallup.com/poll/189071/little-change-employee-engagement-january.aspx,
accessed Feb 14, 2018