'Token economy'- is the next big thing you might have heard about everywhere. What it is, how are they using human psychology and how are startups like Cred using it ?
Let's talk about all of that in a Thread 🧵
Creating a token economy is a method that is used by someone or some institution, to encourage and enhance desirable behaviour.
How does it actually work?
It has become a system to provide positive reinforcement to an individual by incentivising them with a 'token' because humans work on incentives.
There cannot be a behavioural shift to make people do a certain thing without incentivising it.
Tokens could be anything from a toy, fake money to crypto tokens.
It comes under operant conditioning as it is based on providing the rewards for the desired behaviour.
It was originally used in the psychiatric wards in the hospitals, but now the rising startups are using this process to get the customers hooked to their products by increasing its frequency.
This token economy has been growing at a fast pace and altering the market. We can see a lot of real-life examples which are there right in front of us.
Like Cred Coins:
Essentially your good behaviour of "paying credit card bills on time" is being rewarded.
- Targeted behaviour --> Paying credit card bills
- Reinforced with token --> Receives Cred Coins
- Exchanged for rewards --> Shop with these coins
@kunalb11 the Founder and CEO of Cred said this in @rajshamani's podcast: "Parents try to get people hooked on to a temple. Is the kid interested in God? No. What do they go to Temple for? Prasad. I'm not inventing anything, it's always been there."
The Scenes By Avalon app by @VarunMayya , @ShashankUdupa1 and @abhinavxarora has introduced community tokens. So, every community on that app can have their currency.
The coins are distributed based on your good behaviour inside the community.
If you attend an event you'll get some coins, if you write something in the forum you'll get some coins.
And those coins can be used to buy things from the community shop.
Many Discord servers also have intra-community currency to create stickiness for their communities.
Myntra with its parent company, Flipkart is also using the 'supercoins' to generate repetitive sales by allowing its customers to earn insider points and avail heavy discounts.
They're rewarding frequent customers because as humans we like availing big cash discounts.
Raoul Pal Of Real vision said that the community token cryptocurrency industry is going to become a trillion-dollar industry in 5-10 years.
Community tokens are crypto-tokens which are issued inside an organisation. People are rewarded using these tokens.
If you know any other companies which have been using token economics, then do tell us about them in the comments 😃
If you liked this thread then do Retweet 🔄 the first tweet and Follow @FinFloww for more 😃
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Tim Cook, CEO of Apple gave a statement- "I do think there will be a day when people looking back will say Apple's greatest contribution to the world was healthcare."
A detailed thread🧵on why Apple Inc. has been trying to get into the healthcare industry?
Apple's been designing its products- whether it's a device or Software- around healthcare. Their motive is to make "healthcare more human".
They have assembled a bench already with a team of physicians and engineers to build products spiralling around the healthcare market.
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Price discrimination is a practice of charging different prices from different consumers to maximise their profits and capture the entire consumer surplus.
Consumer Surplus is the entire difference between what a consumer is willing to pay and what he actually paid. It’s the total benefit to the consumer when the price that he’s paying is way lesser than the one he’s willing to pay.