1.

Problems and Recommended Solutions: The case raises 2 questions: Question 1: Does stickK
have a viable business model? To answer this question, we need to separate its 2 customer
segmentations and evaluate in each segments: B2C and B2B. B2C Model: StickK is providing a
solution to an ongoing problem with people, which is people’s failure in commitments to
their goals. It fills the gaps of people having a goal and achieving a goal. If we look at New
Year’s resolutions, the most frequent goals that a person normally sets, according to a
research by University of Scranton, 41% of Americans frequently makes at least a new
resolution every New Year, and 17% infrequently does so. However, 91% of them claim they
are not successful at achieving what they wished for4. Another success factor of stikK is that
it does not limit itself to any niche (although 80% of its contracts dealt with weight loss or
fitness and health). Based on Figure 2.1., it is an advantage that stickK could cover more
types of resolutions:

2. 4. Average revenue per stake: Since it is clearly helping people, they need to find a different
method to increase this number. This can come from a monthly challenge or even a
competition between users to increase the total amount per stake; or to sustain a recurring
revenue stream. B2B Model: While its B2C model is a freemium model where it offers free
services to gain future transactions5, B2B model is direct sale where it engages customers
with product demonstration and customizations. It is clear that its current enterprise
solutions are heavily labor intense, including sales force, product development, customer
service and maintenance team. Although this model can provide a more stable and predicted
revenue stream, it may eventually become non- scalable when the more revenues they
want, the bigger teams they need to grow into, the bigger operation expenses incur such as
management, training, etc. It was already forecast that stickK needs a new account manager
every 6 month. Due to its labor intensity and high customizations, its enterprise solution cost
is currently marketable to big enterprises only. In this segment, it will face a tough
competition from Virgin Pu Number of returning paid users, or simply failed cases: this is to
evaluate how willing the market is to accept it. It was stated in their internal document that
almost 82.8% of its contracts with stakes are success stories; which means its revenue comes
from 17.2% of unsuccessful cases.  Number of contracts with stake per user: despite a
growing user’s database, its revenues can only grow once users tend to put in more
contracts, or simply want to achieve more goals. Figure 2.1. New Year’s Resolution Statistics.
Source: https://www.statisticbrain.com/new-years- resolution-statistics/ stickK is the only
player in the market that actually uses a different styles of approaches to help people
achieve their plans: loss aversion (scare of financial loss), regret aversion (regret of financial
loss), people’s bias thinking and optimism of what they can do (through the goal-setting
process) and social norms (using communities, social effects, and roles of supporters and
referees). This was proven through the highly successful concept – “Commitment Contracts”.
32% of contracts are with stakes and 82.8% of them are successful. However, in order to fully
answer this question, we may need more data from stickK, especially not in their acquisition
plan, but in their retention plan: lse. As of 2016, it already covers 120 of Fortune 500
companies.6. Hence, a larger funding may be required to go to this market. However,
according to Gallup (Figure 2.2.), the majority of U.S. employees were "not engaged", and
15.7% were "actively disengaged."7. Therefore, if stickK enterprise solution can push this
 number up through its “commitment contracts” concept, they may find a huge potential
market to grow.

3. 5. Stronger competitors B2C is the model they should continue right now. However, to
improve its questionable recurring revenue stream, they should have a scheduled or
recurring engagement activities / programs with current database. stickK can also add in
features such as reminders or coaching to its users on how to achieve their goals which can
be a premium features for a subscription; because it is already a great motivation
application, it can also become a coaching application using the same concept. stickK also
needs to trademark their Commitment Contracts scheme to raise the entry barriers.
However, B2B model can be less labor intense if they can shift their segments into medium
enterprise with a lower price. A semi-customization process can be in place to prevent an
increase in cost. Corporation with companies like Slack can also be considered to integrate
with their products. This can be a win-win collaboration. 3. Obstacles to Implementations:
Although its approach of Commitment Contract has been proven to work effectively, its
future is still questionable. How likely its customers are to return to create a new contract
whether Maximum product development required  Labor intense which can be eventually
non-scalable  Low entry barriers  Questionable recurring revenue stream  High entry
barrier due to its high customization process Cons  Better recurring revenue stream  Less
direct competitors  Minimal product development required  Minimum labor required to
grow  Proven organic and rapid acquisition growth Figure 2.2. % Engaged employees in US.
Source: http://news.gallup.com/poll/189071/little-change-employee-engagement-
january.aspx Question 2: Should stickK choose B2C or B2B? B2C B2B Pros

4. 6. or not the last one helps? As of now, there are many specific goal-setting applications
available (relating to finance, health, etc.), hence customers can later lean to other
alternatives despite a bit drop in their goal achievement success rates.