StickK
Encyclopedia
stickK.com is an American Internet start-up company that enables users to make commitment contracts in order to reach their personal goals.
The site also allows for referees - people selected by the user to help monitor the progress of their contract. When a user submits a report to the website, the referee is asked to confirm the accuracy of the report. Users are also allowed to designate other users and friends. Such people, known as supporters, receive emails about the users' progress.
professors, Dean Karlan
and Ian Ayres
. During graduate school at M.I.T., Karlan and a colleague made a wager to lose 40 pounds each, and to referee one another so as to stay on target. Their service draws on their experiences and two principles from behavioral economics, loss aversion
and time inconsistency. They recruited Jordan Goldberg, then a student at the Yale School of Management
, to build the company.
The company was founded in New Haven in 2007 and subsequently moved to New York City. It was initially funded by a $150,000 investment from the three founders, and later raised about $2 million from a pool of investors in two rounds. The web site was launched in the beginning of 2008.
Usage of the site is free for individual users, with the initial business plan involving advertising revenues. The company later created non-free B2B
products, offering corporations a co-branded version of StickK for the use of their employees or members. In May, 2010 stickK.com launched Choose You, where individuals can write commitment contracts and have their friends or family pledge money to the American Cancer Society
if the contract is fulfilled.
According to Goldberg, users who put money on the line and have a referee tend to do best. 78% of these users achieve their goals, as compared to only 35% who put no money down. Steven Levitt
, co-author of Freakonomics
, wrote about and approved of the website and its concept. StickK also appears in the [popular press] book More Than Good Intentions
, where it is mentioned as an example of a type of commitment device that can be adapted to development programs in microsavings and health.
According to Karlan, the company's name comes from 'stick'ing to it, and the second K is the legal shorthand for a contract. It also refers to carrot and stick
.
Service
stickK users set up a "commitment contract" where they agree to achieve a certain goal, such as losing weight, exercising more, quitting smoking, or conserving energy. They sign a legally binding contract that will send their money to third parties, including either individuals (referred to as "Friend or Foe") or a number of organizations and charities. If users pick "Charity" as a recipient of their forfeited money, stickK selects the charity for the user. Users can also pick a specific organization whose views they oppose referred to as "anti-charities."The site also allows for referees - people selected by the user to help monitor the progress of their contract. When a user submits a report to the website, the referee is asked to confirm the accuracy of the report. Users are also allowed to designate other users and friends. Such people, known as supporters, receive emails about the users' progress.
History
stickK was started by two Yale UniversityYale University
Yale University is a private, Ivy League university located in New Haven, Connecticut, United States. Founded in 1701 in the Colony of Connecticut, the university is the third-oldest institution of higher education in the United States...
professors, Dean Karlan
Dean Karlan
Dean Karlan is a Professor of Economics at Yale University and a Research Fellow at the Abdul Latif Jameel Poverty Action Lab at the Massachusetts Institute of Technology...
and Ian Ayres
Ian Ayres
Ian Ayres is an American academic who is the William K. Townsend Professor at the Yale Law School and a Professor at the Yale School of Management.-Biography:...
. During graduate school at M.I.T., Karlan and a colleague made a wager to lose 40 pounds each, and to referee one another so as to stay on target. Their service draws on their experiences and two principles from behavioral economics, loss aversion
Loss aversion
In economics and decision theory, loss aversion refers to people's tendency to strongly prefer avoiding losses to acquiring gains. Some studies suggest that losses are twice as powerful, psychologically, as gains....
and time inconsistency. They recruited Jordan Goldberg, then a student at the Yale School of Management
Yale School of Management
The Yale School of Management is the graduate business school of Yale University and is located on Hillhouse Avenue in New Haven, Connecticut, United States. The School offers Master of Business Administration and Ph.D. degree programs. As of January 2011, 454 students were enrolled in its MBA...
, to build the company.
The company was founded in New Haven in 2007 and subsequently moved to New York City. It was initially funded by a $150,000 investment from the three founders, and later raised about $2 million from a pool of investors in two rounds. The web site was launched in the beginning of 2008.
Usage of the site is free for individual users, with the initial business plan involving advertising revenues. The company later created non-free B2B
Business-to-business
Business-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...
products, offering corporations a co-branded version of StickK for the use of their employees or members. In May, 2010 stickK.com launched Choose You, where individuals can write commitment contracts and have their friends or family pledge money to the American Cancer Society
American Cancer Society
The American Cancer Society is the "nationwide community-based voluntary health organization" dedicated, in their own words, "to eliminating cancer as a major health problem by preventing cancer, saving lives, and diminishing suffering from cancer, through research, education, advocacy, and...
if the contract is fulfilled.
According to Goldberg, users who put money on the line and have a referee tend to do best. 78% of these users achieve their goals, as compared to only 35% who put no money down. Steven Levitt
Steven Levitt
Steven David "Steve" Levitt is an American economist known for his work in the field of crime, in particular on the link between legalized abortion and crime rates. Winner of the 2004 John Bates Clark Medal, he is currently the William B...
, co-author of Freakonomics
Freakonomics
Freakonomics: A Rogue Economist Explores the Hidden Side of Everything is a 2005 non-fiction book by University of Chicago economist Steven Levitt and New York Times journalist Stephen J. Dubner. The book has been described as melding pop culture with economics, but has also been described as...
, wrote about and approved of the website and its concept. StickK also appears in the [popular press] book More Than Good Intentions
More Than Good Intentions
More Than Good Intentions: How a New Economics is Helping to Solve Global Poverty is a non-fiction book by Yale economist Dean Karlan and field researcher Jacob Appel published in 2011. It combines insights from behavioral economics with field research from developing countries to discuss and...
, where it is mentioned as an example of a type of commitment device that can be adapted to development programs in microsavings and health.
According to Karlan, the company's name comes from 'stick'ing to it, and the second K is the legal shorthand for a contract. It also refers to carrot and stick
Carrot and stick
Carrot and stick is an idiom that refers to a policy of offering a combination of rewards and punishment to induce behavior. It is named in reference to a cart driver dangling a carrot in front of a mule and holding a stick behind it...
.