Executive Summary:
HealthyWage is a platform that allows users to place bets on the weight that they will lose over a certain time span.
HealthyWage makes money from the bets that its users lose, paid sponsorships, administration fees, as well as by selling aggregated data to companies.
Founded in 2009, HealthyWage has become one of the leaders in the weight loss wagering space (next to DietBet). The company has paid out over $50 million in cash prizes to this date.
How Does HealthyWage Work?
HealthyWage is a platform that allows people to place bets on the amount of weight that they lose. People are making bets against the company itself.
Here’s how it works. First, users enter all the relevant data into HealthyWage’s calculator, including:
- How much weight you plan to lose.
- How long you plan to reach your goal.
- How much money you plan to wager each month.
And a few more data points such as your current weight, height, gender, or underlying motivation to lose weight.
HealthyWage then comes up with a price proposal based on the information you just added. Should you hit your weight goal, then HealthyWage will pay out the price money via check or PayPal.
HealthyWage, furthermore, provides you with an app (available on Android and iOS devices) to track your progress and stick to your goals.
On top of that, users get access to the firm’s own staff of coaches, which is comprised of nutritionists and physical trainers.
Apart from individual challenges, users can also participate in group challenges. These can either be a group of friends or through your employer.
The various competitions are available to people from almost all across the world, including Canada, the UK, Australia, Mexico, and many more.
HealthyWage claims to have helped thousands of people to successfully lose weight while paying out average cash prices of $1,331.
A Short History Of HealthyWage
HealthyWage, headquartered in New York City, was founded in 2009 by David Roddenberry and James Fleming.
Prior to launching the service, both founders gained substantial experience in the business world as well as the court of law.
Roddenberry, who attended Harvard Law, had stints at Boston Consulting Group and The D. E. Shaw Group where he did strategy work for a $45 billion hedge fund.
He then went on to launch JoltEdge, a digital media company focused on the asset management industry. The business was sold within six months of being operational.
Fleming, on the other hand, received his J.D. from the University of Minnesota Law School. Afterward, he held various positions as a clerk and associate for the US Court and private law firms. He was already working on HealthyWage while pursuing a partner track at Paul Weiss, a New-York-based law firm.
After working on the concept for almost a year, HealthyWage launched in September 2009 at TechCrunch 50. Roddenberry pitched the concept in front of a jury that was comprised of Marc Andreessen, Tony Hsieh, and Marissa Mayer.
Around the same time, a variety of similar services, including HealthRally and StickK, were launched to the public as well.
HealthyWage, despite the heightened competition, prevailed. And it did so without ever raising any venture capital funding.
Apart from being very capital efficient, the company also employed some clever marketing tactics along the way. In January 2019, for instance, it offered Rob Kardashian $50,000 if he were to hit a certain weight loss goal.
To this date, HealthyWage has paid out over $50 million in cash prizes to its users. Close to 50 people are furthermore employed by the company.
How Does HealthyWage Make Money?
HealthyWage makes money from the bets that its users lose, paid sponsorships, administration fees, as well as by selling aggregated data to companies.
Let’s take a closer look at each of these in the section below.
Betting
The majority of the income that HealthyWage generates comes from the wagers that it places against its users.
HealthyWage makes money whenever a user loses his or her bet. Its profit is maximized by correctly assessing odds while still offering lucrative cash incentives.
Users are incentivized to participate not only through their own motivation but via the abundance of success stories that the company posts.
While it can be believed that HealthyWage does want its users to succeed (nothing contradictory has been reported to this date), it is also incentivized to ensure that not all of them win.
Oftentimes, this is either being taken care of by human nature (i.e. laziness) or outside circumstances. For instance, some users had reported that the company was unwilling to refund their wagers even after they suffered major accidents which made it impossible to participate.
Sponsorships
As previously stated, HealthyWage works together with a variety of corporate partners to launch its weight loss challenges.
These partners pay HealthyWage in exchange for organizing these challenges. This is especially valuable to employers who contribute to employee health insurance programs. The fitter their staff is, the lesser the insurance has to be used.
Administration Fees
HealthyWage collects a 25 percent administration fee on money that users win. If the user, for instance, wins $1,000 in cash prices, then HealthyWage gets to keep $250.
Data
Trying to lose weight with HealthyWage does not only burn a lot of calories but also creates an abundance of data.
To participate, users enter a variety of information such as their age, weight, height, and location. Furthermore, the app tracks how that user progresses in his or her weight loss journey.
HealthyWage can then sell that data in an aggregated format to advertisers. It does not share any details, such as the user’s name or address.
Yet, advertisers may still find the aggregated information useful. Examples would include what percentage of males are overweight or what average BMI females in their 30’s possess.
