Give back by checking into the real-world places you go each day. It’s good Karma.
Just days after we posted our trend piece on geolocation, inspired by the “clear implications for entrepreneurship, sustainability, and green business,” we witness the launch of CauseWorld, a mobile geolocation iPhone/Android app that enables users to earn points (Karma) by checking into various locations and convert them into charitable donations and other social goods. It’s essentially SocialVibe meets Foursquare. Given that it’s backed by legendary VC Kleiner Perkins, this is one to take seriously.
The CauseWorld model follows a recent trend wherein consumers become an integral part of a company’s philanthropic or CSR efforts. The reasoning goes something like this: If we’re already giving to charity, why not get some extra credit and exposure by involving our customers and potential customers in the process? Web 2.0 technologies and mobile apps make this quite easy to execute and manage. CauseWorld’s novel approach leverages geolocation and commerce (geo-commerce) in forming a business model with clear social value.
For example, when you check into a restaurant or retail outlet using the CauseWorld app, you earn Karmas (points). When you accumulate enough of them, they can be donated to various causes. Instead of attaching overt monetary value, though, Karmas are converted into more tangible impacts such as offsetting two pounds of CO2, donating a book, or planting a tree. This is clever because the perceived value of these goods is much greater than the actual. It certainly feels better to plant a tree than to donate 10 cents (market price for tree planting) to American Forests.
You’ll earn an average of 10 Karmas per check-in, and it takes 100 Karmas to plant a tree. So you’re earning roughly a penny per check-in at that rate of conversion. This isn’t meant as a criticism because it’s a helluva lot more than you get from a Foursquare check-in. It’s only fair, though, that we put things into context.
These donations are currently funded by $500,000 in grants from CitiGroup and Kraft Foods. Each time you make a donation, there is a reminder about which company (sponsor) made it possible. This is a key component of the model because it facilitates a feel-good engagement with the sponsor’s brand. CauseWorld has essentially placed a value of one penny per point by making a total of 50,000,000 Karmas available. When you do the math, it’s quite a bargain for Citi and Kraft to be earning positive brand engagements at a rate of $0.01 to $0.10 a piece. Over time, CauseWorld can develop a competitive marketplace for these engagements, whereby sponsors bid for the spots. This can potentially raise the cost to purchase Karmas associated with certain causes, where CauseWorld could earn a margin on the exchange. At this point it’s not clear whether this is part of the revenue model.
Like Foursquare, you’ll also earn status symbols (badges) as you accumulate points and convert them. Naturally, there are limits to the number of times you can check in per day, and you can only check into a single location once per day. The app offers Facebook integration, so you can automatically post your CauseWorld actions into your news feed, and it has a well-designed e-mail invite feature. There is also a Community Achievements board that tracks where the Karmas are being donated, complete with the aggregate impacts.
TechCruch outlined the core business model on the commerce end:
For now businesses that get the extra foot traffic are paying nothing at all. Although I’m sure [parent company] Shopkick will be sending reports to those businesses letting them know how many people they brought into their stores. In the retail world, people mean conversions, usually 25% – 90%, depending on the type of store (nobody walks into 7-11 or a supermarket without buying something, but less people buy something at Best Buy).
I applaud the charitable aim of CauseWorld, but I also note a brilliant business plan – finding ways to get people to step foot inside a physical store. If I was Gap or Nordstroms I’d pay right now to distribute karmas to users of the app for coming into the store.
This is a geolocation game in the spirit of Max Gladwell, so we’ll be playing along and reporting on its progress.