Making stickK Stick: The Business of Behavioral Economics Custom Case Solution & Analysis

1. Evidence Brief: Case Extraction

Financial Metrics

Seed Capital: Initial funding of 1.2 million dollars raised from angel investors (Exhibit 1).
B2B Revenue Model: Pricing tiers range from 2 dollars to 5 dollars per employee per month for corporate wellness programs.
B2C Revenue: Commission on funds forfeited to partner charities; interest income on escrowed stakes (Paragraph 14).
User Growth: Approximately 150000 commitment contracts created by 2013 with over 14 million dollars in total stakes (Exhibit 4).
Operating Costs: Primary expenses include platform maintenance, customer support for contract verification, and B2B sales cycles.

Operational Facts

Core Product: Web-based platform for commitment contracts using loss aversion and social accountability.
Verification Mechanism: Use of a designated referee or physical evidence to confirm goal achievement.
Stake Destinations: Users choose between a friend, a charity, or an anti-charity (an organization the user dislikes).
B2B Integration: Platform white-labeled for corporations to track employee health goals like smoking cessation and weight loss.
Team Structure: Small leadership team led by CEO Jordan Goldberg with academic oversight from founders Karlan and Ayres.

Stakeholder Positions

Jordan Goldberg (CEO): Focused on scaling operations and finding a sustainable revenue mix between consumer and enterprise.
Dean Karlan and Ian Ayres (Founders): Academic economists viewing the platform as a real-world application of behavioral science.
Corporate Clients: Seeking measurable reductions in healthcare premiums and increased employee productivity.
Individual Users: Seeking a tool to overcome time-inconsistency and lack of willpower.

Information Gaps

B2B Retention: Precise renewal rates for corporate clients after the first year of implementation.
B2C Acquisition Cost: Exact marketing spend required to acquire a new active user on the consumer site.
Stake Distribution: Percentage of users choosing the anti-charity option versus standard charities or friends.

2. Strategic Analysis

Core Strategic Question

How can stickK transition from a behavioral science experiment into a high-growth enterprise without losing the efficacy of its commitment model?
Which customer segment provides the highest lifetime value relative to acquisition costs?

Structural Analysis: Jobs-to-be-Done

Users do not hire stickK to track data; they hire it to provide the willpower they lack. The job is psychological enforcement. While the B2C market is vast, the willingness to pay for this enforcement is low among individuals. Conversely, corporations have a high willingness to pay because employee failure costs them money in insurance premiums. The structural advantage lies in the B2B segment where the buyer (the employer) and the user (the employee) have aligned interests in the outcome, but only the buyer has the budget.

Strategic Options

Option 1: Pure-Play B2B SaaS Pivot.
- Rationale: Shift all resources to corporate wellness. Higher margins and predictable recurring revenue.
- Trade-offs: Requires significant investment in a professional sales force and integration with HR software.
- Requirements: Dedicated enterprise sales team and API development.
Option 2: B2C Premium Marketplace.
- Rationale: Retain the consumer base but charge for premium referees or professional coaching.
- Trade-offs: High churn and difficulty in scaling the quality of human referees.
- Requirements: A network of certified coaches and a revised mobile user interface.

Preliminary Recommendation

Pursue Option 1. The B2C model serves as a valuable brand builder and data source, but the unit economics of corporate wellness are superior. The company should reposition itself as an insurance cost-reduction tool for HR departments rather than a self-help website for individuals.

3. Implementation Roadmap

Critical Path

Month 1-2: Standardize the B2B offering. Develop a clear ROI calculator for HR directors showing the link between commitment contracts and reduced health insurance premiums.
Month 3-4: Build integrations with major health tracking hardware and enterprise HR platforms. Automated data entry reduces the friction of manual reporting.
Month 5-6: Hire three enterprise sales representatives with experience in the benefits space. Focus on mid-market firms with 500 to 5000 employees.

Key Constraints

Sales Cycle Length: Corporate benefit decisions often occur once per year. Missing the window means waiting twelve months for a contract.
Evidence Friction: If the process to prove a goal is too difficult, employees will stop using the platform, leading to low B2B renewal rates.

Risk-Adjusted Strategy

To mitigate the long B2B sales cycle, maintain the automated B2C platform as a low-touch lead generation engine. Use consumer success stories as case studies for corporate pitches. If enterprise adoption lags, the fallback is a licensing model for insurance companies to offer the tool directly to their policyholders.

4. Executive Review and BLUF

BLUF

StickK must pivot to an enterprise-first model. The consumer business provides brand recognition but lacks a path to profitability due to high churn and low per-user revenue. The enterprise health and wellness market offers recurring revenue and a clear buyer motive: reducing insurance costs. Success depends on shifting from a science experiment to a professional services platform. The company should prioritize API integrations that automate goal verification, as manual reporting is the primary failure point for long-term engagement. Exit the pursuit of B2C advertising and focus entirely on the B2B sales pipeline.

Dangerous Assumption

The most consequential unchallenged premise is that corporate HR departments value behavioral science results more than they value ease of administration. If the platform requires significant HR oversight to manage, even high success rates will not prevent churn.

Unaddressed Risks

Regulatory Risk: Changes in labor laws or privacy regulations regarding how much an employer can monitor employee health data (High consequence, moderate probability).
Brand Dilution: The anti-charity model, while effective for individuals, may be seen as too aggressive or controversial for a corporate environment (Moderate consequence, moderate probability).

Unconsidered Alternative

A white-label licensing model for life and health insurance providers. Instead of selling to individual employers, stickK could license its logic and patent-pending commitment structure to insurers who then distribute it to their entire pool of policyholders. This would bypass the high cost of building an internal sales force and provide immediate scale.