Right now, millions of Americans are sitting on millions of dollars worth of unredeemed rewards earned by their participation in brand loyalty programs. Personally, I have more than 1000 stars wasting away in my Starbucks app that I have no plans to use, as I stopped going to Starbucks in favor of Peet’s – if only I could trade my Starbucks loyalty points for Peet’s loyalty points. Or, better yet, imagine a world in which I wouldn’t even need separate apps (or physical punch cards) to manage all my brand rewards. Our team is building a product that will make these dreams come true: we’re working to develop an app that uses the blockchain to help users keep track of, earn, and trade loyalty points.
Our ideal initial market to target comprises of young, tech savvy, financially independent, and price conscious individuals who already use loyalty rewards programs. We want to target people who are already comfortable with technology and enjoy being early adopters of exciting new technology. Additionally, we target price conscious people, as they are more likely to care about a loyalty rewards app that helps them save money. For our SOM, we initially want to target a small part of these young early adopters (potentially by starting marketing in the Bay Area). Eventually, we want to expand to reach all 20-35 year olds in North America. To start, we will begin by focusing on consumer facing brands like coffee shops, convenience stores, grocery stores, restaurants, travel (airlines, hotels), and retail stores (like clothing and makeup stores). The total loyalty rewards market is estimated to be worth $17.65B by 2028, so by targeting a small portion of that market, we estimate that our initial market is worth about $155 million.
For our tech stack, we plan to build a mobile app that interfaces with the blockchain. For frontend development, we will use React Native, for our backend we will use GCP, and to interface with the blockchain we will use Alchemy and Crossmint, which allow decentralized apps to easily connect to the blockchain.
Some early ethical considerations we will need to address include how or if we plan to advertise on our platform, how we will handle user data, and how our service will affect small vs. large businesses differently. We imagine that in the future our platform may be used to advertise particular deals for certain businesses. We will need to ensure that we present these advertisements in an ethical way and make sure that the businesses we advertise adhere to our ethical standards. Our platform will also collect data on how users use and trade their loyalty points. We will need to decide if this is data we want to share with or sell to other businesses who may want access to this kind of data – some of this information may reveal private, personal spending habits of some of our users. Finally, we imagine that this kind of platform could disproportionately help larger businesses over smaller businesses. Larger businesses’ points may be more desirable than smaller businesses. Many smaller businesses have loyalty programs to try and retain customers when they do not have the brand recognition of larger businesses, and if people are able to trade away points from smaller businesses it may hurt small businesses’ ability to retain new customers. Additionally, larger businesses with large liabilities on their balances sheets because of loyalty rewards points may be more inclined to allow users to trade points in the first place because they hope that customers will use their loyalty rewards points to reduce companies’ liabilities. Small businesses likely do not have the same concerns about liabilities, so this platform may not help them in the same way it helps large businesses.
Our first pass BMC is attached:
