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Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

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181–190 of 309 posts

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#181
This is really cool! From what I've seen (though my knowledge is certainly not comprehensive) so many of the fin-tech/challenger bank apps and options that have sprung up over the past few years don't really have that interesting hook to differentiate themselves from one another. It looks like you guys have something special here. (It at least caught my attention :))

I don't know the economics around acquisition/retention in this space (or much about revenue streams from a user...) but it seems like the core offerings of challenger banks and banking in general are relatively fungible and that long term success will really come down to how efficient you are on gaining and keeping your base from going elsewhere. However, I've also read on how the markets challenger banks are aiming at are greenfield in comparison to the established players, so there may be room for lots of small players for a good while. I'm really interested in how Yotta/this space is going to diversify in the future since the inherent location moat of the brick and mortar banks (i.e. you had to bank at what was nearby - nobody was going to the next state over to bank) doesn't exist and the core banking products (checking/savings/loans) are generally the same. Who comes out on top in the long run - the banks with specialized offerings that generate more revenue per user, or ones that only do the regular banking products but are super operationally efficient? When and how will consolidation happen/is scale the most important thing? Just doing some personal spitballing here, as I doubt there is anything here you guys haven't already thought of.

As another former finance person now in consumer analytics/tech (coincidentally, also Penn/Wharton '14) it's always cool to see more work being done on the product and creation side. Would love to chat/connect to see if I could be helpful (selfishly, I'd like to learn more about your guys' work.) Of course, no strings attached and no pressure at all.

Best of luck!

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#182
post #90

Earlier quoted context omitted.

The value is in the hope it creates. As a statistician, a lottery seem hopeless. To everyone else, it's about feeling that something impossible becomes possible. Tbh lottery tickets can be a pretty cheap form of hope relative to other forms of gambling. Take a look at some of RobinHood's customers who are ”investing”. The odds seemed so favorable until they realized 95% of traders lose their money.

But people routinely buy insurance, and it's considered a right and moral thing to do. Though the math is exactly the same as with the lottery. Statistically, odds are unfavorable. But it buys peace of mind, so people pay.

The insurance is given a polarity and connection to the rest of your luck in such a way that it smooths out your risks. On the other hand, playing the lottery makes your good luck spikier. (Though there are more specific ways to say it, we could say that insurance is meant to make your life less impacted by chance -- more predictable -- while insurance is meant to make it more impacted by chance -- more unpredictable.)

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#183
post #75

Earlier quoted context omitted.

The irony of using the promotional approach of an awful poverty tax by a startup focused on promoting saving.

It‘s pretty darn smart. A lot of people I know play the lottery instead of putting a couple of bucks to the side. Seems like a win-win

Somewhere I read an argument that numbers games (private, local lotteries, sometimes run by organized crime) helped some poor people by acting as a form of savings, except one that paid a negative interest rate and where you couldn't control the timing of when you got your savings out.

That sounds like a super-awful kind of savings account, but I think this argument assumed that many numbers-game players' next-most-preferred use of the money they would bet on it was even less like savings, so it could still be helpful by pulling money away from other things. Of course, that's a pretty big and pretty specific assumption.

This project and the idea that inspired it are a way better form of savings because the savers can actually access their principal and don't actually have to pay the bank.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#184

Copying and pasting a note I wrote when I cam across this on Twitter [1] For the sweepstakes aspect, not considering the splits for larger prize money, the expected value is ~ $0.02 for every $25 you put in. The APY here seems to be 0.2% which seems to be lower than Ally which offers 1.1%. Though, the aim seems to be to “gamify” baking. [1] https://twitter.com/adithya_balaji/status/127593565571819521...

I think I would enjoy a project to gamify baking! :-)

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#186

Earlier quoted context omitted.

How can the customer confirm that the numbers are truly random and drawn live so you can't coordinate with them? It's to both your benefit and the insurance company's to not have high dollar prizes pay out. The insurance company would be on the hook for the prize, and it would cause your premium to go up. Companies wrongfully fight unemployment claims all the time to keep their insurance rates down. It would be awful…

We want to show the customer that the number draws are truly random. We may do live drawings at some point, which could help. Would love any ideas on how we can hammer home that the number drawings are random and totally kosher. It actually would be beneficial for us for someone to win the jackpot, and not beneficial for the insurer. The marketing benefit of a $10 million payout that an insurance company pays for wou…

The cryptography world has a ton of ideas about this, but it's possible that most of your customers wouldn't find it easy to understand why some of those ideas are correct and fair.

A simple one (not necessarily anywhere close to the best that cryptography people have come up with) is to combine several sources of randomness in a prearranged time order and format, and use the result as input into a prearranged cryptographic hash function. At least some of those sources should be publicly verifiable, and at least one of those should be https://beacon.nist.gov/home. I can think of critiques and limitations in this approach, but it's a good start!

Edit: someone elsewhere in this thread has given a link to a more sophisticated method.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#187
post #86

In Brazil we have "Capitalization Titles" that banks can offer to its clients. Usually you sign up with a fixed monthly fee (say R$50/month) for 1 year, and the chance to win monthly or weekly sweepstakes. When the period is over, you get your money back, plus some little earnings, usually just enough to cover inflation. I'm not too familiar with it, but that's basically it. Very common here.

Interesting - I haven't come across Capitalization Titles. I will definitely look into these now. Thanks for sharing

I didn't know about this before but since I speak Portuguese I was easily able to find

https://pt.wikipedia.org/wiki/T%C3%ADtulo_de_capitaliza%C3%A...

That Wikipedia article is very skeptical toward this instrument. Notably, it looks like the typical implementation is like a Certificate of Deposit in the U.S., where the depositor's money is locked up for a fairly long period of time. At least one author of the Wikipedia article suggests that it would be more advantageous for depositors to use a regular interest-bearing deposit instrument. I guess that criticism doesn't address whether it's succeeding in getting some people to save who otherwise might not save at all, and might also be less applicable when the depositor doesn't have to wait a super-long time to make withdrawals.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#188
post #36

From the FAQ > While technically not "interest," you receive a savings bonus every month that functions very similarly to "interest." Savings bonuses are paid on the first of every month and are based on your average balance in Yotta from the previous month. How do taxes work with these "savings bonuses". Do you issue a 1099-INT for this money earned or does this show up on a W-2G?

It's considered miscellaneous income. We issue you a 1099 if you win more than $600 in the calendar year

Does the monthly interest also count towards the $600 for the 1099, or do you also issue a 1099-INT for the monthly interest?

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#189
Great idea. I've just signed up and made my first deposit. I must say, though, that "Show my name to everyone" and "Show my name to friends" being default-on (and not obviously so) already erodes quite a bit of my trust, and I'm considering withdrawing my money as a result. My savings, for me, are an entirely private matter.

Re: Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save

#190

Earlier quoted context omitted.

incidentally, you’re describing a key limitation of economic systems, whereby value as represented by price doesn’t reflect holistic utility to infinitely-complex humans and human societies. it’s true of basically everything, including stocks (efficient markets and all that), and forms the basis of a material critique of laissez faire capitalism.

This is interesting. The way I understood the work of von Neumann and Morgenstern on game theory, there is an extensive discussion of utility and the derived ordering on preferences. I interpret recent work on behavioral economics as building on their work to call into question the claim that one can easily estimate such a utility function for an economic agent in a manner invariant to the internal state of that agen…

This is interesting :-)

Is there any reasonably accessible literature on this topic, in particular the latter idea of not being able to estimate an agent’s utility function?

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