Category: Making Money

How Much Money Can You Make With StepBet? (Part 2)

So a few weeks ago I let you in on an app Marge started using called StepBet. This is a fitness challenge app that syncs with your FitBit and encourages you to make your walking goals by taking your money if you fail! You pay $40 into the pot, and at the end, everyone who hasn’t failed out splits the remaining money from all the losers. In other words, their loss is your gain.

Naturally, I was wondering what kind of return you would get on your $40 investment, and what kind of cut exactly StepBet takes. Well, now that the six week game is over, I can tell you how much she made.

What do you get?

On an initial investment of $40, she got back $46.55.


On one hand, that’s $6.55 for six weeks worth of work, if keeping on top of your walking every day counts as “work” for you. Not a ton of money, but what can you expect? Anyway, six dollars is six dollars.

On the other hand, if you’re walking a lot anyway, that’s an annualized return of 142%! Sounds so much better that way, right? I mean, it almost meets the definition of passive income, if you walk a lot. But if something fails, or you miss two days in a week, you would have a 100% loss on your hands.

What does StepBet get?

The game started out with 1,192 players, and almost 300 failed before the six weeks were up.  If you were to divide that total pot of $47,720 over the remaining 897 players, they would each get $53.20 back. But that’s not what we got… StepBet has some convoluted rules about the payout amount, but by giving each of the 897 remaining players back $46.55, we know that the total paid back was $41,755.

That means StepBet took nearly $6,000 as their “cut” from this one game. Keep in mind, groups of people are starting up new games constantly, and big games like this, I think, start weekly. Not a bad gig. Maybe instead of walking so much, we should all be inventing apps!

It is intriguing. I may even try it myself sometime. See, I also just bought myself a Fitbit. And in keeping with our frugal philosophy (Marge got hers as a gift), I bought mine used. I have a whole entry coming up on the insane discount you get when you buy electronics secondhand.

Have you ever done a fitness challenge where money was involved?

 

How Much Money Can You Make With StepBet? (Part 1)

Like so many other people, a few years ago Marge got a FitBit for Christmas. Fitness trackers were suddenly taking off and she immediately got obsessed with beating her friends’ daily step goals inside the app. Really, it was bad. Like, pacing-around-the-kitchen-at-10PM bad.

Her obsession has tapered off since then, but she’s of course kept up with her 10,000 step daily goal in order to be more Amish. But her obsession has grown anew when her friend told us about an app she’d been using called StepBet.

According to their website, StepBet is a “fitness game that motivates you to be more active.” Players basically put their money on the line as encouragement to get themselves moving. If you don’t hit your targets, you lose the money, and it gets paid out to everyone who does complete their goals. You can imagine where my interest comes in.

How much money can you make with StepBet?

The way it works is you basically pay in $40 to the pot. Each game lasts six weeks, although the first week is a “practice week” and no one gets eliminated, so there are five competitive weeks. The app calculates for you an Active Day step count goal and a Stretch Day goal based on your prior activity.

You have to hit four Active Day goals and two Stretch Day goals each week, with one day left over for “rest.” If you miss any of your goals, you’re eliminated. But as long as you keep completing your goals, your app displays how many players started the game, and how many of these foes you have vanquished!

There are risks, though. Besides getting lazy, I imagine the biggest one is something going wrong with the technology. What if your FitBit doesn’t sync to your phone, or your app crashes, or it doesn’t connect to the website? Or what if you get injured and can’t walk as much? Apparently they have “referees” to deal with this, but I would still be worried about losing my money through no fault of my own.

Marge joined a game at the beginning of last week. Here’s her progress screen as of Saturday:

Her normal goal is almost 11,000 steps a day, and her stretch goal is over 13,000 steps. That’s a lot of steps. But as you can see, she goes far beyond the stretch goal, so I wouldn’t bet against her. The real question is how much money will she make in the end? Here’s what the game’s stats look like as of Saturday:

The total pot is $48,160, with 1,204 players putting in $40 each. As you can see, 41 players had already been eliminated by Saturday. Weaklings!

So if we divide the remaining pot among the 1,163 players, they should get $41.41 back each. That is, if StepBet itself didn’t take a cut. Aye, that’s the rub. According to their website, StepBet “retains 25% of the gross pot to pay Referees, transaction fees, game hosts, and administrative support.”

The website’s FAQ also says StepBet “has a No Lose Guarantee so that you’ll never lose money if you reach your goal. If the StepBet challenge has an unusually high percentage of winners, we will forfeit our portion of the pot to ensure that all winners get their money back.” That sounds to me like you might not get any more than $40 back even if 25% of the contestants are eliminated.

If I’m following them correctly, their take from this contest would be $12,040 (25% of $48,160). That leaves $36,120 for everyone else. So if anywhere from 903 to 1,163 contestants remain, divide the $36,120 among the winners, they would get less than $40. StepBet would forgo a bit of their fee in order to get the winners up to $40. The only way you get more than $40 is if there are fewer than 903 winners.

How exactly will it pan out and how much will it pay out? We’ll have to see in about four weeks. Although I would think the outcome of this contest should be indicative of StepBet contests on the whole. 1,200 contestants is a good sample size, so it should demonstrate what the average drop out rate is. Then we can figure out what the rate of return is on this most odd of financial instruments. Even a couple dollars would be a good return on $40 over five weeks.

Anyone else put your money on the line with StepBet?

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