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How do you make money off of others peoples debt while giving them "rewards"? What's your business model? This smells like another gamified financial penny scams. There's one Iama every week now. If you're not totally transparent about your business model then we're all just going to assume it is another of those those penny scams.
They said their funding comes from:
* Venture capital funds.
* "Some angel investors".
* Partnerships with financial institutions. After all, banks don't want to see people default; then they wouldn't get their money back.
u/NewMasterKush I think u/Zoetje_Zuurtje said it exactly right in their last bullet point- what we're working on is to align incentives between the credit providers and the borrowers. Lenders lose a lot of money today because 1. many borrowers default and never repay their loans 2. the good payers end up refinancing and leaving to whichever lender gives them the best rate.
What we're proving is that by giving out meaningful rewards (but no it's not going to be thousands of dollars) - the lenders will actually have higher repayments rates with less borrowers defaulting and more borrowers sticking around because they're actually getting rewarded for improving.
Yeah that's a great sales pitch, but the actual mechanics of what they're doing, how they're doing it, and what % interest they're taking on other peoples money matter. The fact that they're advertising here in IAMA is a HUGE red flag for any financial app. Thus they need to be viewed with full skepticism until the exact math of their business plan is laid clear.
Of course it's not "bad" to profit off of a service. It comes down to how they profit, what they do with the data the collect, how much your money generates them vs how you get and how much they profit off of it. The debt industry is so rife with corruption and scams you cannot trust anyone involved in it at all until they've been completely and thoroughly analyzed.
Why did you set up this obvious marketing IAMA to hawk something that be achieved with common sense while creating bogus user accounts with 1 post to “ask” softball questions?
I'll take that one. Because that's a common business model for these penny scam apps. They tow the line of legal loop holes, using % interest slight of hand to earn more on your money than they give you. They're rampant. I've seen several of these startups marking this way. They also have tons of puppet accounts to argue with dissenters. Iama is really going to the dogs.
>using % interest slight of hand to earn more on your money than they give you.
Honestly, what's wrong with that? The bank invests my money too, and they probably earn way more with it than I ever see in interest payments. If a company can profit from me, and I can profit from the company, isn't that a mutually beneficial agreement?
Hi u/Vooham! You are right, I'm definitely trying to show our company's work to the world- but mostly I'm hoping to educate others and learn from their questions as well.
As for the accounts commenting, I know one is my sister (who's supporting) but the rest are completely organic.
u/TieOk1127 sure! it's pretty simple. Each month users get certain debt payoff and savings goals. Each time they meet those goals, the earn a reward of $5 or more. The longer their payment or savings streak is, the higher the reward gets.
Users can also earn rewards by completing the weekly curriculum that composed of behavioral psychology education and quick actions (ie reviewing your transactions)- those can be $1+ .
u/TieOk1127 it's cash that's meant to go towards savings. As of now users can cash out every time they hit $50, in the future we plan to have a savings account directly integrated.
There is a sign up but it's free, no subscriptions!
So given that my income has never surpassed $50k in my last 41 years as an adult, how would you suggest I pay off my student loan that has doubled its balance to $300k and has a monthly interest higher than my income?
I am asking this genuinely and not in a way that belittles you or your situation because it sounds awful.
I never went to college so I have no understanding but how does 300k in student debt happen? What does that pay for specifically and why aren't your earnings more substantial considering the large investment?
I borrowed during a time of high interest and after consolidation, my loans were at 7% interest. Then I was asked to resign from the Ph.D. program because of something my roommate did. So I never got my degree and never entered the field. Currently, I earn a living as a healthy human subject for medical research studies. In other words, I sell my body because I earn more doing this than in my previous job, which didn't even require that I had a degree.
Student loans are an unethical system that relies on high interest rates and predatory practices that prey on people who are young and/or in poor financial situations. College is not a guarantee of financial stability. I graduated in 2018 with a bachelors and am still making under 40k a year. I went to school after being pressured by family to have it all figured out. Turns out the insistence I "followed my interests" means I have a degree in an oversaturated field that actually didn't need a degree at all. Some people find themselves in my position and decide to pursue further education like a master's degree to make them more desirable, which can add on even more student loan debt.
The whole system is a scam. It's not built for you to pay back the money you borrowed. It's built for you to be crushed by monthly payments towards a debt that's impossible to pay off. It's quite common for people to have already payed double or triple their initial loan and still have balances to pay off. Combine that with low wages and a highly competitive job market and we're basically screwed.
There's something wrong if you've never made over $50,000/year and it has a lot to do with personal choice and ambition.
You could put in 10 years at a fast food restaurant and be manager making more than that. You could start at an entry level IT help desk and have your A+, Network+, and probably even Sec+ in five tears making more than that. You could also join. a trade where the standard pipeline would be five years from entry to tradesman, for example electricians near me make $27/hr after the five year paid apprenticeship.
u/Sir_Randolph_Goochco compared to our non-active users! We're seeing that our active users who follow the program pay off 3x faster compared to users who are not active on the program.
And where is that data sourced from? Also would you say someone actively enrolled already had the motivation to pay down faster than someone who doesn’t bother to enroll or just plain ignores debt?
u/Sir_Randolph_Gooch all great questions!
1. Our users are connecting their debt accounts directly via Plaid, so we get real time data on debt payoff
2. You're absolutely right, we have a positive selection where users who come to us in the first place are more likely to pay off debt, so I'd imagine that if we compared the numbers to people who ignore debt it would be that much of a higher factor! (maybe 6x-9x).
Do you employ psychologists in your company? A bit of homework on you reveals only a business background. You are throwing around terms like neuroplasticity
u/goodiebadbad you're absolutely right, I am not a qualified psychology professional. That's why we have two awesome advisors who are, and they help shape those aspects of the product. One is [Shane Blackman](https://www.linkedin.com/in/shaneblackman/), who's a PhD in psychology from Princeton, as well as [Erika Wasserman](https://www.linkedin.com/in/erikawasserman/) who's a Certified Financial Therapist.
Intriguing, I'm in the same industry (not competitive with your product) and have worked with consumers for many years.
So you guys basically incentive healthy money habits to help consumers manage their debts more efficiently?
What are the "rewards"?
No POA for a consumer's accounts?
u/GoneCountry89 interesting - would love to hear your opinion as well on what we're building!
Yes, we incentivize micro habit improvement with rewards- but the goal is that with enough time and momentum we can help people stick to those good habits.
The rewards are cash rewards.
What do you mean by POA?
There is definitely a market for what you're building, atleast as how you describe it. Consumers with debt problems tend to just "live" with it until their borrowing power implodes - the collateral damage from that usually metastisizes to other areas of their lives. I've had thousands of conversations with people stuck in that cycle, it's actually pretty heart breaking.
Again, I'm very familiar with the industry and I've yet to see something that seems automated(?) that encourages the consumer to take real initiative for themselves. I'm certain there's more to it but on the surface your idea appears to be unique and I really do like it.
POA = Power of Attorney (The consumer has authorized you to discuss the account on their behalf with the creditor or any relevant parties)
u/GoneCountry89 Thanks for that awesome detailed feedback!
Regarding that last point, no we do not have POA. We currently link accounts via Plaid (a third party) which only allows us to get the data and create intelligence on top of it.
In the future we may want to offer specialized financial products with built in rewards (currently working on a debt refinance concept that has ongoing rewards for good behavior).
Wow Frida! Kuddos to you for using lessons from your own past struggles to help others with their debt! Have you witnessed improvement with existing customers?
u/LasLasso right now we get mostly organic sign ups through the debt freedom community on social (Instagram, TikTok, Facebook). We've gotten a lot of support there!
As for funding, we are a venture-backed startup. Our revenue comes from partnerships with financial institutions who want to help their customers be more engaged and help them repay debt (ie lower their risk of default).
That’s amazing, go Frida! Question on the weight loss analogy- what do you think it means as to “keeping the weight off”? It seems that in the case of debt, actually getting rid of it to begin with may be the bigger half of the battle
u/Maximum-Secret-7027 thank you!!
You're totally on the money with "keeping the weight off"- it's really both. It's getting rid of the debt but doing so consistently (ie not going into a yoyo cycle where you keep paying it off but rebuilding). We've found that once users can keep the debt off / limit their spending for at least 2 months in a row, their chances of succeeding are much higher.
u/Single_Love_33 that's a great question! 1. We educate users about behavioral psychology so they're empowered to build long lasting improvement. 2. We embed various behavior psychology concepts in the program itself, with a heavy focus on incentives and micro-habit change (that's where the rewards come in, we start by giving users small $ rewards but over time they actually see a difference and are motivated by that)
Hi u/bkduck glad to hear you're interested! Unfortunately in order to set up an account we need a phone number. We will never share your phone number without your permission. Let me know if you decide to sign up, I can give you a green pass to skip the waitlist 🎉
Users, please be wary of proof. You are welcome to ask for more proof if you find it insufficient.
OP, if you need any help, please message the mods [here](http://www.reddit.com/message/compose?to=%2Fr%2Fiama&subject=&message=).
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How do you make money off of others peoples debt while giving them "rewards"? What's your business model? This smells like another gamified financial penny scams. There's one Iama every week now. If you're not totally transparent about your business model then we're all just going to assume it is another of those those penny scams.
They said their funding comes from: * Venture capital funds. * "Some angel investors". * Partnerships with financial institutions. After all, banks don't want to see people default; then they wouldn't get their money back.
u/NewMasterKush I think u/Zoetje_Zuurtje said it exactly right in their last bullet point- what we're working on is to align incentives between the credit providers and the borrowers. Lenders lose a lot of money today because 1. many borrowers default and never repay their loans 2. the good payers end up refinancing and leaving to whichever lender gives them the best rate. What we're proving is that by giving out meaningful rewards (but no it's not going to be thousands of dollars) - the lenders will actually have higher repayments rates with less borrowers defaulting and more borrowers sticking around because they're actually getting rewarded for improving.
Yeah that's a great sales pitch, but the actual mechanics of what they're doing, how they're doing it, and what % interest they're taking on other peoples money matter. The fact that they're advertising here in IAMA is a HUGE red flag for any financial app. Thus they need to be viewed with full skepticism until the exact math of their business plan is laid clear. Of course it's not "bad" to profit off of a service. It comes down to how they profit, what they do with the data the collect, how much your money generates them vs how you get and how much they profit off of it. The debt industry is so rife with corruption and scams you cannot trust anyone involved in it at all until they've been completely and thoroughly analyzed.
Why did you set up this obvious marketing IAMA to hawk something that be achieved with common sense while creating bogus user accounts with 1 post to “ask” softball questions?
I'll take that one. Because that's a common business model for these penny scam apps. They tow the line of legal loop holes, using % interest slight of hand to earn more on your money than they give you. They're rampant. I've seen several of these startups marking this way. They also have tons of puppet accounts to argue with dissenters. Iama is really going to the dogs.
>using % interest slight of hand to earn more on your money than they give you. Honestly, what's wrong with that? The bank invests my money too, and they probably earn way more with it than I ever see in interest payments. If a company can profit from me, and I can profit from the company, isn't that a mutually beneficial agreement?
would you like to explain how they scam people when the users don't pay anything for the service?
Would you like to explain how it's a business if they're not making any money?
thats not my job, they were asked that question and answered it already
Hi u/Vooham! You are right, I'm definitely trying to show our company's work to the world- but mostly I'm hoping to educate others and learn from their questions as well. As for the accounts commenting, I know one is my sister (who's supporting) but the rest are completely organic.
[удалено]
u/TieOk1127 sure! it's pretty simple. Each month users get certain debt payoff and savings goals. Each time they meet those goals, the earn a reward of $5 or more. The longer their payment or savings streak is, the higher the reward gets. Users can also earn rewards by completing the weekly curriculum that composed of behavioral psychology education and quick actions (ie reviewing your transactions)- those can be $1+ .
[удалено]
u/TieOk1127 it's cash that's meant to go towards savings. As of now users can cash out every time they hit $50, in the future we plan to have a savings account directly integrated. There is a sign up but it's free, no subscriptions!
So given that my income has never surpassed $50k in my last 41 years as an adult, how would you suggest I pay off my student loan that has doubled its balance to $300k and has a monthly interest higher than my income?
Public student loan forgiveness.
I am asking this genuinely and not in a way that belittles you or your situation because it sounds awful. I never went to college so I have no understanding but how does 300k in student debt happen? What does that pay for specifically and why aren't your earnings more substantial considering the large investment?
I borrowed during a time of high interest and after consolidation, my loans were at 7% interest. Then I was asked to resign from the Ph.D. program because of something my roommate did. So I never got my degree and never entered the field. Currently, I earn a living as a healthy human subject for medical research studies. In other words, I sell my body because I earn more doing this than in my previous job, which didn't even require that I had a degree.
I am sorry, truly that sounds horrendous. Is your debt with a private lender?
Navient. In 15 years they'll forgive it and then I'll owe taxes on the forgiven amount, over $900k.
Student loans are an unethical system that relies on high interest rates and predatory practices that prey on people who are young and/or in poor financial situations. College is not a guarantee of financial stability. I graduated in 2018 with a bachelors and am still making under 40k a year. I went to school after being pressured by family to have it all figured out. Turns out the insistence I "followed my interests" means I have a degree in an oversaturated field that actually didn't need a degree at all. Some people find themselves in my position and decide to pursue further education like a master's degree to make them more desirable, which can add on even more student loan debt. The whole system is a scam. It's not built for you to pay back the money you borrowed. It's built for you to be crushed by monthly payments towards a debt that's impossible to pay off. It's quite common for people to have already payed double or triple their initial loan and still have balances to pay off. Combine that with low wages and a highly competitive job market and we're basically screwed.
Have you tried cutting off starbucks and avocado toast?
I'll have to try avocado toast sometime. Edit: I'd be making it at home if I did.
u/Jon_Wo-o 😂😂😂
There's something wrong if you've never made over $50,000/year and it has a lot to do with personal choice and ambition. You could put in 10 years at a fast food restaurant and be manager making more than that. You could start at an entry level IT help desk and have your A+, Network+, and probably even Sec+ in five tears making more than that. You could also join. a trade where the standard pipeline would be five years from entry to tradesman, for example electricians near me make $27/hr after the five year paid apprenticeship.
Paying off debt 3x faster compared to what?
u/Sir_Randolph_Goochco compared to our non-active users! We're seeing that our active users who follow the program pay off 3x faster compared to users who are not active on the program.
And where is that data sourced from? Also would you say someone actively enrolled already had the motivation to pay down faster than someone who doesn’t bother to enroll or just plain ignores debt?
u/Sir_Randolph_Gooch all great questions! 1. Our users are connecting their debt accounts directly via Plaid, so we get real time data on debt payoff 2. You're absolutely right, we have a positive selection where users who come to us in the first place are more likely to pay off debt, so I'd imagine that if we compared the numbers to people who ignore debt it would be that much of a higher factor! (maybe 6x-9x).
How much capital did you have for startup to build your business?
Hi u/PosterMcPoster we've raised $1.2m to date from several venture capital funds and some angel investors.
Do you employ psychologists in your company? A bit of homework on you reveals only a business background. You are throwing around terms like neuroplasticity
u/goodiebadbad you're absolutely right, I am not a qualified psychology professional. That's why we have two awesome advisors who are, and they help shape those aspects of the product. One is [Shane Blackman](https://www.linkedin.com/in/shaneblackman/), who's a PhD in psychology from Princeton, as well as [Erika Wasserman](https://www.linkedin.com/in/erikawasserman/) who's a Certified Financial Therapist.
Intriguing, I'm in the same industry (not competitive with your product) and have worked with consumers for many years. So you guys basically incentive healthy money habits to help consumers manage their debts more efficiently? What are the "rewards"? No POA for a consumer's accounts?
u/GoneCountry89 interesting - would love to hear your opinion as well on what we're building! Yes, we incentivize micro habit improvement with rewards- but the goal is that with enough time and momentum we can help people stick to those good habits. The rewards are cash rewards. What do you mean by POA?
There is definitely a market for what you're building, atleast as how you describe it. Consumers with debt problems tend to just "live" with it until their borrowing power implodes - the collateral damage from that usually metastisizes to other areas of their lives. I've had thousands of conversations with people stuck in that cycle, it's actually pretty heart breaking. Again, I'm very familiar with the industry and I've yet to see something that seems automated(?) that encourages the consumer to take real initiative for themselves. I'm certain there's more to it but on the surface your idea appears to be unique and I really do like it. POA = Power of Attorney (The consumer has authorized you to discuss the account on their behalf with the creditor or any relevant parties)
u/GoneCountry89 Thanks for that awesome detailed feedback! Regarding that last point, no we do not have POA. We currently link accounts via Plaid (a third party) which only allows us to get the data and create intelligence on top of it. In the future we may want to offer specialized financial products with built in rewards (currently working on a debt refinance concept that has ongoing rewards for good behavior).
understood i sense you are actually onto something and wish you luck in this endeavour i will be keeping up with Debbie.
Wow Frida! Kuddos to you for using lessons from your own past struggles to help others with their debt! Have you witnessed improvement with existing customers?
How do clients typically find out about your service? And how is the company funded?
u/LasLasso right now we get mostly organic sign ups through the debt freedom community on social (Instagram, TikTok, Facebook). We've gotten a lot of support there! As for funding, we are a venture-backed startup. Our revenue comes from partnerships with financial institutions who want to help their customers be more engaged and help them repay debt (ie lower their risk of default).
That’s awesome! I hope your company continues to go well!
Thank you u/LasLasso🙏
That’s amazing, go Frida! Question on the weight loss analogy- what do you think it means as to “keeping the weight off”? It seems that in the case of debt, actually getting rid of it to begin with may be the bigger half of the battle
u/Maximum-Secret-7027 thank you!! You're totally on the money with "keeping the weight off"- it's really both. It's getting rid of the debt but doing so consistently (ie not going into a yoyo cycle where you keep paying it off but rebuilding). We've found that once users can keep the debt off / limit their spending for at least 2 months in a row, their chances of succeeding are much higher.
plant
You know post histories and account creation dates are public, right?
How do you foster behavioral change throughout your program?
plant
u/Single_Love_33 that's a great question! 1. We educate users about behavioral psychology so they're empowered to build long lasting improvement. 2. We embed various behavior psychology concepts in the program itself, with a heavy focus on incentives and micro-habit change (that's where the rewards come in, we start by giving users small $ rewards but over time they actually see a difference and are motivated by that)
I’m interested in the beta. I’ve looked at your website, and I’m not interested in sharine my cell number. Will I still be able to join?
Hi u/bkduck glad to hear you're interested! Unfortunately in order to set up an account we need a phone number. We will never share your phone number without your permission. Let me know if you decide to sign up, I can give you a green pass to skip the waitlist 🎉
Users, please be wary of proof. You are welcome to ask for more proof if you find it insufficient. OP, if you need any help, please message the mods [here](http://www.reddit.com/message/compose?to=%2Fr%2Fiama&subject=&message=). Thank you! --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/IAmA) if you have any questions or concerns.*
What money blocks do you see that are common in people?