How does DietBet make money?

  • DietBet is a web-based platform that uses social gaming and financial incentives to promote weight loss. It was created by entrepreneur Jamie Rosen after witnessing the effectiveness of an office weight loss competition.
  • DietBet makes money from a commission it collects based on the total dollar amount of each prize pool before it is distributed to participants. The commission is somewhere between 10 and 25%, depending on the amount that is wagered.
  • DietBet employs the poker rake model because competition winners take money from the losers. The company does not risk its own money in a weight loss bet, nor does it stand to benefit when a customer fails to achieve their goal.

Origin story

DietBet is a web-based platform that uses social gaming and financial incentives to promote weight loss. 

The platform was created by entrepreneur Jamie Rosen in 2011 who was inspired by friends who were competing in an office weight loss competition.

Rosen noticed that his friends seemed more motivated to lose weight because of an evolutionary tendency to mimic the people around them.

This tendency, he posited, was a better form of weight loss than traditional methods advocating proper nutrition and exercise.

DietBet was eventually launched in 2013 on a simple premise. Users join a social dieting campaign where each member is challenged to lose 4% of their body weight in four weeks. Each must also bet on themselves by paying into a pot.

Those who manage to achieve their stated weight loss goal share the total pot proceeds between them. In this way, the platform makes weight loss fun, exciting, and competitive. 

The DietBet weight loss game has now been played by over 300,000 players in more than 100 countries around the world.

The biggest pot on the platform netted the participants a combined $366,060, though Rosen suggests social interaction and the adoption of sustainable healthy eating habits is a more important measure of success.

These characteristics have enabled DietBet users to collectively lose some 3.6 million pounds of body weight.

DietBet revenue generation

DietBet makes money from a commission it collects from the total dollar amount of each pot. This commission is used to pay for transaction, employee, and other company expenses. 

Some of the pot commission also pays for DietBet Referees, many of whom former players providing important weight-loss support and training to the DietBet community.

The exact amount collected is in the range of 10-25%, depending on the amount wagered or the game selected.

For those seeking to shed a few pounds, there are two game options:

  1. Kickstarter – the original four-week game where the goal is 4% weight loss. The average bet amount for each participant is $35.
  2. Transformer – a longer game lasting six months where the goal is 10% weight loss. In this case, each participant is charged $35/month or $175 upfront. 

Note that the commission is taken from the gross pot before it is paid out to winners. In this way, the players who fail to meet their weight loss goals do not incur any fees.

The strategy DietBet employs is sometimes referred to as the poker rake model, where competition winners take money from the losers. Importantly, the company does not risk any of its own money and has no financial incentive for its customers to lose.

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Related Business Model Types

Platform Business Model

A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Marketplace Business Model

A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Network Effects

A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Asymmetric Business Models

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Attention Merchant Business Model

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Wholesale Business Model

The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.

Retail Business Model

A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.


A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.

Crowdsourcing Business Model

The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.

Open-Core Business Model

While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.

Open Source vs. Freemium

Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.

Freemium Business Model

The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.

Freeterprise Business Model

A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.

Franchising Business Model

In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
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