how-does-healthywage-make-money

How Does HealthyWage Make Money? The HealthyWage Business Model In A Nutshell

HealthyWage is an American health and wellness company with a core focus on weight loss and fitness challenges with cash prizes. HealthyWage has a unique means of generating most of its revenue. The company acts like a traditional bookmaker by ensuring that it “wins” more often than “loses.” This is how the company can maintain profitability. Corporate partners also pay HealthyWage to run and manage employee weight loss challenges.

Origin Story

HealthyWage is an American health and wellness company with a core focus on weight loss and fitness challenges with cash prizes.

The company was founded in 2009 by David Roddenberry and Jimmy Fleming. Both were enthused by research out of Harvard University suggesting people could be encouraged to lose weight if there was a cash incentive to do so.

This forms the premise on which the app is based – that people are only motivated to lose weight if it is their own money at stake. In the HealthyWage app, each user makes a personalized bet based on how much weight they want to shed and the timeframe to do it in. The user must also decide how much money to wager on monthly progress.

HealthyWage then uses this information to formulate a price proposal. Users are rewarded for hitting their weight loss goal but have to pay HealthyWage in full if they fail.

The company has become one of the leaders in the weight loss wagering space, beating out several competitors with virtually no venture capital funding. It has paid out over $40 million to successful weight loss participants since its inception.

HealthyWage revenue generation

HealthyWage has a rather unique means of generating most of its revenue.

Let’s now take a look at it in more detail in addition to a few more traditional streams.

Betting

While HealthyWage no doubt wants its users to collect a cash prize for reaching their goals, the company does make money when a user loses their bet.

In some respects, the company acts like a traditional bookmaker by ensuring that it “wins” more often than it “loses”. Ultimately, this is the only way the company can maintain profitability.

It also likely banks on the fact that most people are lazy or unmotivated and will therefore have to forfeit their bet.

Sponsorships

HealthyWage is also paid by corporate partners to run and manage employee weight loss challenges.

Corporations are generally incentivized to increase employee health to reduce insurance claims and avoid productivity losses resulting from absenteeism.

Administration fees

When a HealthyWage user wins their bet, it is important to note that the company still takes a 25% administration fee.

Data

As noted earlier, a user wanting to create a bet must enter their stated goal and timeframe. They must also enter more personal information such as age, height, and weight and provide progress reports whilst on their weight loss journey.

This gives HealthyWage access to a vast amount of valuable data which is then on-sold to advertisers in aggregate format. Personal details such as name and address remain anonymous.

Key takeaways:

  • HealthyWage is an American health and wellness company best known for the way it uses cash prizes as incentivization for weight loss.
  • HealthyWage is a company invested in the weight loss of its customers. But to make money, it must count on the majority of users failing to reach their stated objective.
  • HealthyWage also collects sponsorship revenue from corporations who want to maintain employee health and performance. It also sells anonymous user data to advertisers.

Read Next: How Does Instacart Make Money, How Does DoorDash Make Money, Does M1 Finance Make Money, How Does Airbnb Make Money, How Does Robinhood Make Money.

Main Free Guides:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"