How to Turn Gamification Into a Retention Powerhouse — Anton Derlyatka, Sweatcoin

Every 1,000 steps earns 1 sweatcoin. A 'validator' checks steps are real (no phone on a dog, a washing machine or a phone farm). Coins can be turned into products, services, experiences, charity donations or sent to friends. Framed as 'you walk anyway, why not earn something useful' rather than guilt-based fitness messaging. Steps are reframed as a balance that keeps growing instead of a daily counter that resets to zero, so the balance itself acts as a progression system. A daily cap on coins earned keeps the economy sustainable.

After YC rejected them for slow growth (Nov 2016), set a target of 300 new users a day. Since the company issues its own currency, a referral program cost no cash. Built a simple journey: after install, the home screen shows only two ways to earn sweatcoins, walking or inviting a friend for 5 sweatcoins. Earning coins is the core experience, with spending options coming later, so inviting is baked into the main loop.

Rather than an Amazon-style catalogue they could not stock, ran a small curated list: about four products a day with a new product every day (about 12 a week), using their network to find ~12 brands willing to give value in kind because they liked the idea. Early rewards were real products paid 100% in sweatcoins, not coupons (e.g. Vivobarefoot gave 100 pairs of last season's shoes). Partners handle fulfilment, so redeeming users land on the brand's site and often buy more. Later added discount vouchers while keeping items unique; in some markets positioned as a product discovery channel for health and wellness startups.

Despite being anti-banner-ads, introduced optional rewarded video: 1 sweatcoin for watching a video to the end. Capped at once a day initially; tested 3 a day for some users. Allowing more views than that hurt retention. About 20% of users engage with and like ads; the rest ignore them.

During COVID, added digital rewards from subscription services such as Spotify and Apple Music: the first three months are paid in sweatcoins, after which the user pays cash. Digital rewards avoid slow physical fulfilment, which matters for instant gratification.

Noticed some early users with social followings were bringing in hundreds or thousands of invites by sharing their link. Saw a gap: creators with ~5,000-50,000 followers had no easy way to monetize (brand deals go through agencies, slow approvals, unclear attribution, long payment cycles). Built a secret marketplace section that opens once a user has 30 successful invites, where invites convert into bigger prizes (Anton's made-up example: 1,000 invites for a PlayStation, 5,000 for a flat-screen TV). This grew into the Influencer Hub, a VIP version of the app with more prizes and service.

Three stages. 1) Groundswell: work with friendly influencers making content native to each channel (genuine, not polished, especially for TikTok) so people with followings hear of the brand. 2) Take the winning influencer content, share it with other influencers as ideas, and run some of it as paid ads (paid is ~10% of acquisition). 3) Rely on strong user-to-user invites: when time between one user installing and their invitee installing shrinks, 6-7+ people can join a chain within 24 hours, and App Store/Google algorithms pick the app up, adding organic installs. Tuned over years through experimentation.

Deliberately avoided looking like a fitness app: a wallet, a marketplace, techy generative graphics and a nod to the emerging crypto scene, making it the only financial-looking app in health and fitness. Dropped the working title FitCoin as too cozy for the more polarizing Sweatcoin. Launched in 2016, just before the 2017 ICO boom.

Built the free product with inherent restrictions from the start (e.g. a daily cap on coins earned, limited rewards) that can later be lifted. After reaching scale and profitability on brand partnerships and ads, launched a basic subscription: removes ads, lifts free-tier restrictions, adds costlier features that can't be given free (a walking coach in development). Model likened to Southwest adding a premium cabin: same plane, better seats. Jacob compares it to game subscriptions like Pokemon GO that boost your ability to play.

Works with the NHS National Diabetes Prevention Programme (for pre-diabetic patients, run via private providers), acting as the engagement platform. The NHS funds an extra range of prizes and incentives on top of Sweatcoin, requiring a deeper integration (details not shared).