January has come to a close, meaning that some of you have already abandoned those well-intentioned New Year’s resolutions. You can try to salvage your best-laid plans by taping them on the fridge or by hiring a personal coach.
But now there are new options available online. Nearly a dozen websites claim to help you achieve your goals by utilising the principles of behavioural economics, or how social, emotional and other factors influence our financial decisions.
Earlier this month, the New York Times carried an article, “How To Keep Your Resolutions,” by two university professors with an interest in behavioural economics, Kathrine L. Milkman and Kevin G. Volpp. They listed five key strategies:
- Make your resolution very specific.
- Put your money where your goal is.
- Combine your temptations with your hoped-for activities.
- Seek social support.
- If you fail, try again on an auspicious date, anything from the first of another month to your birthday.
Milkman and Volpp noted that a website like stickK.com could help you succeed with their second strategy. In fact, a growing number of similar sites are dedicated to your personal goal-achievement. Here’s a list compiled by Beeminder.com, one of the sites.
The Beeminder owners say they’re not concerned about publicising their competitors. “The web space is so open, and the concept so new, that any publicity is more likely to help us than hurt us,” says Beeminder’s Dan Reeves.
The concepts underlying all these systems originated with prospect theory, notes George Wu, professor of behavioural sciences in the University of Chicago’s Booth School of Business. Prospect theory was first hypothesised by Daniel Kahneman, whose work proved so influential that he received a 2002 Nobel Prize in economics, even though he never took an economics course.
“Basically, Kahneman and his colleague Amos Tversky showed that humans are more motivated by fear of loss than by gain,” says Wu, who ran on the Harvard track team in college. “Imagine someone running a marathon with a sub-4:00 goal. As he nears the finish, he sees the big clock. It might show a 3:57-something, a 3:59-something, or a 4:00-something. Which scenario is going to make the guy run fastest in the final stretch? It’s the 3:59 scenario, because he fears he might miss his goal.”
You can practice prospect theory on your own. Just tell a lot of people what your goal is, and you’ll be plenty motivated to achieve it. Because if you don’t, your friends will give you a hard time.
StickK was launched in 2008 by Jordan Goldberg, a Yale M.B.A grad who collaborated with a trio of Yale professors who were behavioural economics experts. One of them was the founder of Honest Tea. StickK, easily the largest of the personal-achievement sites, claims to be “the smartest way to set and achieve your goals.”
Since its launch, StickK has attracted more than 500,000 users who have placed US$16.5 million on the line to chase their goals. If you fail, your money goes to a friend, a favoured charity, or a despised cause (termed an “anti-charity”). Fifty-five per cent of users select an anti-charity. This turns out to be a good choice, sort of. “The people who pledge their money to an anti-charity score the highest in goal achievement,” says Goldberg.
Beeminder is a smaller site with personality and a penchant for mixing metaphors. Beeminder utilises a “yellow brick road” to keep you on track, penalises you with “reminders with a sting,” and suggests that you can “have your cake and don’t have it too.” Its founders like to call the site “StickK on steroids,” because it offers a variety of “quantified self” progress-charting tools.
Both StickK and Beeminder ask users to enter into a commitment contract that clearly states their goal. Both are free if you reach your goal. You lose money only when you fall off track.
StickK users choose a “referee” (a close friend or family member) to decide if they’ve reached their goal. Users must provide a credit card number to access the service, but no charges are made to the card unless your referee says you’ve missed your target. In this month alone, StickK users have pledged almost $600,000 to their goals.
Beeminder doesn’t require a credit card up front. However, if you want to continue using its tools after failing to reach a goal, you’ll have to put up your credit card and a minimum charge of $5. Beeminder operates on the honour system, and your failed-goal money goes directly to the site’s owners, Reeves and Bethany Soule.
That, of course, leads to raised eyebrows. No charity? Just two people trying to take your money? Beeminder launched in 2011 and has 18,000 registered users. “People laughed at us a lot when we first got started,” says Reeves, “and some are still laughing. But they’re also signing up because they see how Beeminder helps them reach important goals, and they believe that’s worth paying for.” The site has been successful enough that Reeves and Soule, who are married, have been able to leave their prior jobs and work full-time on Beeminder.
At both sites, about 40% of users have signed on with weight-loss goals. “Fitness” goals attract about 20% to 30% of all users. At stickK, 29% of fitness seekers are hoping to exercise three days a week, followed by 22% aiming for five days. The most popular contract durations: 6-10 weeks, and 11-15 weeks, each selected by 27% of fitness seekers.
Beyond fitness, Beeminder has carved out a niche in the area of productivity goals like time management and keeping your email inbox under control. It integrates with Gmail, RescueTime, RunKeeper and other services.
Goldberg claims that stickK users have achieved a goal-success rate of 74% when putting up money and using a referee. Reeves says that Beeminder users tend to set open-ended goals like “run 10 miles per week forever.” The site stats indicate that 90% of users who fail, and therefore have to pay Beeminder, re-up and put more money on the line. “They aren’t really failures,” says Reeves. “They use the kick in the pants to keep going, and keep being awesome.”
In other words, the behavioural economics sites practice tough love.
“We’re here to be your friends and help you reach your goals,” says Goldberg. “But we also make you toe the line. We’re enforcers, for your own good.”