Lisbon, where I currently live, is becoming a new tech hub of the European startup community — more and more companies are relocating their teams to Lisbon and opening offices here. I recently visited a company with a very unusual product. They pay their users for… walking. You have probably heard something about Move-to-Earn services, a bunch of which were launched loudly a few years ago. Sweatcoin was the first in Europe. Now it’s a whole ecosystem of mobile apps, a marketplace for active lifestyle goods and services, its own cryptocurrency SWEAT, and 150 millions registered users worldwide.
Oleg Fomenko, one of Sweatcoin's founders, told me how the idea was born. It was a difficult period in his life, a successful UK-based business had to be shut down due to external circumstances related to EU sanctions for Russian companies after the Annexation of Crimea, work was taking up most of the time, and there was neither time nor energy for sports and an active lifestyle. Oleg tried to change his daily habits and started running, but realized that no single product on the market motivates its users to spend their time for active lifestyle on a regular basis. On the contrary, most popular products use all possible ways to make their users spend maximum time looking at the screen of their smartphone sitting on the couch. The human is designed to optimise efforts — our brains tend to save energy. Since ancient times humans are highly motivated to optimise their movement activity only for food search or emergency situations. So human nature is against activity for nothing and only the Instant Gratification model could help to motivate people to more active lifestyle. Thus was born the idea of creating a system where the most basic activity of a person — his movement will bring value and motivate him or her to take more steps daily. You can find a very early Sweatcoin startup pitch video by Oleg on YouTube — very inspiring.
The MVP was created as an outsourced project by an external team and funded by the founder's money in 2014. That was a very basic mobile app based on a smartphone steps tracker. The team had an idea of converting steps into currency from the very beginning, but at those times crypto technologies were in a very early stage, too expensive and slow. So they decided to start as a bonuses and rewards platform. The product value proposition was very clear and easy to communicate:
It pays to walk. Your movement has value: you deserve a share in it.
The product became viral — free marketing and integrated tools supporting the viral loop effect helped Sweatcoin to become the number one app in more than 60 countries and collect a huge active audience.
The Lisbon Sweatcoin team is located in the city centre in the 19th-century Mercado da Ribeira building. This is a coworking space hosted by the Second Home Lisboa team. Sweatcoin is the largest renter, about 40 people work here. There is a nice bar area at the entrance with a large common place for a drink with colleagues and visitors. The working space looks like a jungle — a lot of plants, sun and air. One side of the coworking space is faced the market space on the first flow — a unique working experience with a great view of many grocery shops, fruit and fish sellers and a daily market hustle. At the moment the company is looking for a new larger place to set up a separate space for the team in Lisbon.
Oleg introduced me to one of the Sweatcoin product managers — Maria Samoshenkova. She and her team are focused on the main Sweatcoin app user experience. As the product became quite complex and now includes many different activities, the team is working on the user onboarding flow to make it more clear and more engaging. Gamification tools that Maria’s team is A/B testing at the moment will add a kind of main questline for the beginners to onboard into all Sweatcoin services. Also, Maria shared some inspiring user stories with me. The average user's daily activity level is far below 10000 steps a day — the holy number recommended by most fitness apps. The Sweatcoin app recommends different step goals based on the user’s device Health Kit data and personal activity level. There are 3 types of goals divided into lower, recommended and ambitious activity levels. So every user even with 2000–4000 steps a day will feel rewarded and will be progressing in time. Maria said, that from the customer's research and their data, they learned about users who had a very low daily activity level at the start, but instant gratification tools made them move more and more. People were saying that in the beginning, they were more focused on coins and rewards, so they were increasing their activity level step by step. Then they realised how it makes them more energetic and happy, so they started to support the higher activity level on a regular basis. So the product really helps build good habits and change people’s lives!
The current Sweatcoin business model is based on advertising and partner promotions. A dedicated team is focused on feeding the marketplace with new offers mostly focused on health and wellness products and services. There are more than 600 partners in the Sweatcoin partner network. The users can exchange their coins for large discount offers and goods with free delivery.
SWEAT crypto and Sweat Wallet are part of the new long-term company strategy. The largest challenge at the moment is to connect the existing popular Web 2.0 product and Web 3.0 platform. Now Sweatcoin users are able to create a crypto-wallet and start collecting some part of their daily steps as SWEAT tokens. The idea is that every person's activity level is a valuable factor not only for active lifestyle-related brands but also for people’s daily tasks. For example, what if you could pay part of your health or life insurance with tokens for a special price based on your average activity level? How about using your activity level as a currency for any health-related services in the future? Sounds interesting!
As a first real use case on the global health market, the Sweatcoin team has a partner project with NHS (UK National Health Service). They introduced a special mobile app based on the Sweatcoin platform to people at risk of developing Type 2 diabetes. The product offered information and learning about health, diet, lifestyle, connected users to locally offered services, exercise groups as well as peer support and introduced some good healthy competition. The aim of the programme was to prevent the onset of Type 2 diabetes by supporting and encouraging people to make positive behaviour changes in a way that is engaging. The results of the programme have been phenomenal — the average weight loss per participant was 3kg, with an average increase in walking of +45%. Over 86% of participants who started the programme, completed it (vs industry averages of <25%).
Also, Oleg shared with me an interesting story about how they found the initial investments. In case you have an idea focused on solving challenging people's problems, the problem itself could be a great motivation for a potential investor. So if the problem has some personal importance for the investor it could be much easier to make an investment decision.
Another interesting topic we discussed was the current market trend on AI. Oleg thinks that the Chat GPT-like products' appearance and the hype around this topic are the best that happened in the Crypto industry this year. Many entrepreneurs-adventurers focused on easy money switched from Crypto to AI. Crypto products in general and Move-to-Earn economy products in particular have not the best reputation due to the number of startups launched during the hype wave in the last several years. Many of them were using the financial pyramid scheme selling some virtual stuff and then collapsed. Sweatcoin product is 100% free, you don’t need to spend money to start collecting SWEAT tokens and then using them for the benefits. Just get the app and walk!
Oleg believes that those who keep working on crypto products will be more focused on long-term value for the customers, rather than on fast earnings from them. So we would evidence the new great products changing people's lives and Sweatcoin has a good chance to be one of them!