
Launch HN: Yotta Savings (YC S20) – Behavioral psychology to help people save - adammoelis
Hey HN! We are Adam &amp; Ben, co-founders of Yotta Savings (<a href="https:&#x2F;&#x2F;www.withyotta.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.withyotta.com&#x2F;</a>), an app that uses behavioral psychology to help people save money by making saving exciting. We were inspired to build Yotta by the Premium Bond program (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Premium_Bond" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Premium_Bond</a>) in the UK and a Freakonomics episode on prize-linked savings (<a href="https:&#x2F;&#x2F;freakonomics.com&#x2F;podcast&#x2F;say-no-no-lose-lottery-rebroadcast&#x2F;" rel="nofollow">https:&#x2F;&#x2F;freakonomics.com&#x2F;podcast&#x2F;say-no-no-lose-lottery-rebr...</a>).<p>Premium Bonds is a government-run prize-linked savings program in the UK that started in 1956. It’s a savings account where people get chances to win monthly prizes through a random chance raffle. The more you save, the more entries you get. Premium Bonds are popular because many people prefer the chance to win a life-changing amount of money rather than a small interest payment from a bank. As a result, the program has been successful: over 23M people save through Premium Bonds (33% of the population) with over $100B deposited.<p>Human nature makes it difficult to adopt habits we know are healthy in the long-run but painful in the short run. The idea behind prize-linked savings is to use psychology to make saving exciting in the short run so that people will get the long run benefit. Even if you don’t win a prize, at least you still have access to your savings. You can’t lose anything other than the opportunity cost of interest at another bank.<p>In the U.S, people also like the chance to win a life-changing amount of money. This is what drives much of the $80 billion ($640 per household) spent on the lottery every year despite it being a hugely negative expected value proposition. Prize-linked savings was illegal in the U.S until 2015 when the American Savings Promotion Act was passed based on evidence showing prize-linked savings programs help people save more, especially in financially vulnerable populations.<p>We started building this 9 months ago. Ben and I are both former finance people turned tech people. As personal finance and behavioral psychology nerds (Nudge, Thinking Fast and Slow, etc.), we were excited by the idea of building a product that could help people, but that also had big business potential.<p>The market for consumer deposits in the U.S is huge. We make money by earning interest from our partner bank. We view our savings product as an entry point into the banking market, with the potential to offer a variety of revenue generating services to our users as other neo-banks have done. We plan to differentiate ourselves from
other neo-banks by always offering products that make use of behavioral psychology to nudge people toward healthier financial habits.<p>With our app, you save money in an FDIC insured account. For every $25 you save, you get a recurring ticket into weekly random number drawings with chances to win prizes ranging from $0.10 to the $10 million jackpot. We provide a rate of return on savings that on average is in-line with the top yielding savings accounts out there like Marcus or Ally. You might get a higher return if you’re lucky and win more prizes than expected. You might get a lower return if you win fewer prizes than expected. Even in a worst case scenario where you never win a prize, you still have your savings.<p>Yotta is free. The $10 million jackpot would be paid out by our insurance partner. We are funding a jackpot via insurance to solve the chicken and egg problem of offering a life-changing jackpot that we hope will motivate people, even if the odds are extremely low that you’ll win it.<p>Hope you guys check it out. Happy to answer any questions, and looking forward to any feedback.
======
zomglings
This is an awesome idea, and I intend to try it out.

I am a mathematician, and at the same time I can't resist the temptation to
purchase the occasional lottery ticket. What most people miss about the
lottery is that there can be utility to variance - the opposite of ennui.

Have you guys read The Lottery in Babylon

[https://en.wikipedia.org/wiki/The_Lottery_in_Babylon](https://en.wikipedia.org/wiki/The_Lottery_in_Babylon)

~~~
Jommi
As a mathetmatician how can you ever justify participating in a lottery where
there is a possibility of no-winners or shared winners. It just destroys any
hope of any positive EV.

~~~
zomglings
The point is that my personal happiness level does not only depend on positive
expected gain in capital.

I gain happiness also from the miniscule hope of the life-altering outcome of
winning the lottery.

That gain in happiness is occasionally worth the price of a lottery ticket.

~~~
Jommi
Interesting to hear. This is something similar I do with some betting/stock
buying I do.

But the odds are on a completely different level of impossibility in lottery
that I just cant really get your end of the argument :/

~~~
zomglings
Fair enough - I think it's a subjective thing and also depends on your current
financial circumstances. I'm a starving startup founder, so the hope
represents a real escape from my current financial circumstances.

If I were poorer, I suspect the happiness I gained from the lottery ticket
purchases would be even greater.

If I already owned a home, on the other hand, I would value the lottery ticket
hopes much lower.

~~~
tudorconstantin
I totally understand you! I'm a software engineer since 2006 and even though I
followed a classical career (in Eastern Europe), we (me, my wife and our
daughter) were struggling financially for the first approx 9 years.

Buying a lottery ticket from time to te, when the prize was big, made us live
in a fantasy world between the time we bought it and when te results were
announced. I think this thing - imagining a life without financial worries,
lavish vacations and expensive toys, motivated me to learn more, try to launch
a few startups and sacrifice my free time in order to try and achieve
greatness.

Were those money well spent? Definitely yes (even though I haven't actually
won the lottery)

------
KerryJones
The interest rate (.2%) is very, very small.

I'm currently getting 2% from a non-FDIC insured institution, but there are
many examples of FDIC-insured accounts with far greater returns.

Axos - 1.09% [https://www.axosbank.com/Personal/Savings/High-Yield-
Savings](https://www.axosbank.com/Personal/Savings/High-Yield-Savings)

CIT - .95% [https://www.cit.com/cit-bank/bank/savings/savings-builder-
ac...](https://www.cit.com/cit-bank/bank/savings/savings-builder-account/)

T-Mobile Money - 4% (up to $3,000)
[https://www.t-mobilemoney.com/en/home.html](https://www.t-mobilemoney.com/en/home.html)

I'm a large fan of behavioral finance (read Misbehaving, in Thinking Fast &
Slow), etc. -- but this feels like a huge disadvantage to be giving people.
Unless you have math that says the average winnings people will get will make
up for the .7-8% difference you see other institutions giving?

~~~
adammoelis
The 0.20% is if you win no prizes at all. On average including prizes, the EV
on an annualized basis is around 3% right now. We are subsidizing some of the
prizes currently, which is why it's higher than other HYSAs. In the long run
we will aim to match Marcus and Ally, which right now are at around ~1% but go
up or down depending on market cycles.

~~~
KerryJones
I appreciate the response, I've got a few remaining questions that perhaps you
can shed some light on:

\- Is that only for the average or also for the median?

\- Is the data published anywhere (would love to see distribution curve)?

\- Are the calculations assuming someone is saving every week? Or has it also
been tested monthly / bi-monthly?

\- When someone gets a "windfall", do they keep it in their account or do they
withdraw it? (i.e. no longer savings but spent in some sort of celebration)

\- Is this using an actual random number generator in which case there will be
long-tails of people winning much more as well as losing much more? Or is
there some sort of engine that ensures everyone gets something?

~~~
adammoelis
\- This is the average. Going along with your second question you can get a
sense of the distribution by looking at the payouts and probabilities in the
official rules ([https://www.withyotta.com/official-
rules](https://www.withyotta.com/official-rules))

\- It's purely probabilistic so it doesn't need to be tested. It's just random
number math.

\- Wins are deposited into your Yotta account and are immediately available to
withdraw if you'd like

\- It's an actual random number generator

------
CJefferson
The grand prize of $10,000,000 will be paid out as... $5,800,000? I don't
understand how you justify saying (as far as I can tell) "The grand prize is
$10,000,000. We reckon you could invest $5,800,000 and make $10,000,000 in 40
years, so we will give you $5,800,000 instead".

~~~
adammoelis
A fair point for sure. The rationale is the $10 million headline is the
annuity value of the jackpot, and it's standard practice for sweepstakes or
the PowerBall/MegaMillions contests to use the annuity value for promotion in
marketing materials and on the website.

~~~
unwoundmouse
So if I buy into a 100m dollar powerball, I'm actually getting the net present
value of 100m in 40 years? I'm amazed this is standard practice

~~~
adammoelis
Yeah exactly. Almost any grand prize you see is really the sum of the annuity
value. We kind of have to use the same practice in order to be competitive,
and we think a lot of people assume it's the annuity value sum as well.
([https://www.magnifymoney.com/blog/banking/powerball-
annuity/](https://www.magnifymoney.com/blog/banking/powerball-annuity/))

~~~
alexbanks
You should definitely rethink this. You're a savings account. Be honest (read:
obvious and clear) with your customers.

~~~
lukevp
It’s common knowledge that jackpots have an annuity or a lesser lump sum,
that’s how lotteries work already. This is really just a way to gamify savings
as a lottery, I think it’s a great idea and may sign up. I have a really low
yield savings account right now anyway and was planning to sign up for an
online high yield account.

~~~
alexbanks
You're talking about lotteries. I'm talking about savings accounts. My point
is that savings accounts should be held to a higher standard, because
obviously.

~~~
Ahwleung
But this product is literally a savings account with a lottery attached to it.
Why would you not use the terminology/methods used by the lottery industry
when describing the lottery aspects of the account?

~~~
alexbanks
If you do not understand, I cannot help you.

------
noelrock
Very interesting. An idea that has long held interest (har) for me.

I note from your comments the socially-laudable aim of attempting to help
people in financially vulnerable populations. I wonder if emulating more
elements of a lottery-like game would assist with this... EG imagine if I
could walk into a shop, buy what looks and feels like a lottery ticket, but
I've actually effectively added money to my phone-number linked savings
account. I think there would be real power there, but naturally real
logistical complexity also.

~~~
adammoelis
Totally! We have thought about this a lot. It's too heavy a lift for us at the
moment given the complexity, but this is something on our radar for sure.

Appreciate the feedback.

------
adav
This looks really neat :) But I do wonder how well the Premium Bond (PB) idea
will work when not backed by the state (NS&I, who issue PBs in the UK, is
backed by the treasury). I would personally worry that my deposit will just be
used for prizes in a Ponzi scheme situation.

Another thought is that while it is true that in the UK a large number of the
population have PBs, these are usually bought by their parents when they are
born. I still have my PB account that was set up by my parents, but I wouldn't
consider it a tool for saving. Most people's balance in PBs are a tiny
proportion of their total savings. Yotta's 0.2% base rate might change that
behaviour though!

~~~
adammoelis
Having the backing of the government like with Premium Bonds is huge. Both for
marketing and for trust.

Building trust is definitely a challenge for us as a new company. Funds with
Yotta are FDIC insured up to $250,000, which helps, and we communicate that to
users, but people still need to trust us fundamentally.

We looked into Premium Bonds and also found that a lot of Premium Bond
ownership comes from older generations. We are hoping that our UI and mobile
first approach make the concept more appealing to a younger demographic in the
U.S.

~~~
adav
As a Brit not attuned to American retail banking I didn't notice the FDIC
insurance element (aside: in the UK that's called FSCS Protection). Actually
that's pretty huge for trust, great job :)

~~~
adammoelis
Yup - but people still need to trust that we actually are FDIC insured. We've
had some people contact our partner bank directly to verify they are working
with us, for example. But hopefully as we get some PR and more word of mouth,
we won't have that issue as much.

~~~
adav
Perhaps you could link directly to evidence of your FDIC insurance policy?

~~~
adammoelis
Yeah maybe there is something like that we can do. Hadn't thought of providing
some sort of hard evidence. I will look into this now though!

------
lyrrad
Section 14 of the official rules says that you can write for a list of
winners. [https://www.withyotta.com/official-
rules](https://www.withyotta.com/official-rules)

Does that mean that one could essentially get a list of your customers (that
won in a particular week) if someone requests the winners every week? Over
time one could figure out about how much each customer has in their savings
account.

What information is released on the winners list? I'm not sure if I'd be
willing to sign up for an account where my personal information would be
released publicly if I "won" a 10 cent prize.

~~~
doyleb
We only use first names and last initials along with cities for social proof
to show that people are winning, and we only show when a ticket has won a
notable amount so there's a fair amount of randomness to who shows up
(currently >$10)

We also allow you to be completely anonymous from the privacy settings within
the app.

~~~
lyrrad
Thanks. Can the information about the prize cutoff be added to the official
rules or the FAQ?

Based on this, I think someone with $10000 deposited would appear in the
winners list about 4 times a year, assuming those that win the $15 prize
appear on the list of winners.

~~~
adammoelis
Yeah we will update this. Thanks for the feedback

------
npongratz
Section 8 of the official rules says:

> Potential winner will be notified via the App or using the email address /
> phone number provided with the entry or on file with the Sponsor. Failure by
> potential Sweepstakes winner to respond to the initial verification within
> two (2) days of notification will result in disqualification.

This rule, unfortunately, makes the savings scheme unattractive to someone who
cannot access the "App" or email or phone for extended periods of time.

~~~
adammoelis
Good point. This wasn't intentionally made to be a short period of time. We
will change this to allow for a longer period of time.

~~~
ac29
For reference, winner of large lottery prizes generally have 6 months to a
year to collect winnings.

~~~
adammoelis
Thanks this is a helpful reference point for us

------
llamataboot
I really like this idea, and I can see where you could essentially function as
a bank (make money off the deposits while paying out less than that in the EV
of all winnings) as long as you are prepared to take any hit of variance
(obviously not much variance in your prize structure though, especially with
the big jackpot being pretty much in the realm of impossibility territory)

For those of us that enjoy variance - I wonder if you could make it so we
could generate our own payout structure than could never get above what you
are setting as "EV API"

Based on my back of the envelope calculations you are still running at less
than 1% API, but I could be wrong (still need to run the exact numbers)

I'm not sure exactly how the legality works, and I understand that you need to
make your money, but I do think it is an interesting (if not an MVP) option to
allow advanced users to tinker with the amount of variance - perhaps I want to
support your project in encouraging better savings but I want closer to no
variance, perhaps I don't care about 1% a year but I want the chance of
something more life changing...

~~~
adammoelis
That's really interesting. Something basic we could do is allow users to
toggle between getting a guaranteed return or more tickets. It wouldn't change
the payouts, but it would change your own variance. It's not as flexible as
what you describe though. Will think more on this.

------
borisandcrispin
Some years ago I built a digital piggy bank to help people save money
automatically. The psychology behind the product is really hard. The biggest
challenges is that you only see the value of saving money after a long time.
Everybody knows they should do it, but it's easier to postpone as it's painful
and hard to do in a daily basis.

Yotta solves this with an amazing approach. You get the long term reward of
saving money at the some time that you get the exciting possibility of winning
a short time reward. It's genius.

~~~
adammoelis
Yes this is exactly what we are going for. Would love to chat about more of
any learnings you have from your digital piggy bank savings concept. Saw your
e-mail and will follow up with you there.

------
EL_Loco
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.

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

~~~
schoen
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...](https://pt.wikipedia.org/wiki/T%C3%ADtulo_de_capitaliza%C3%A7%C3%A3o)

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.

~~~
adammoelis
This is interesting. Similar to us in some ways, but we don't lock up your
cash. You can withdraw any time. And no fees. I'll read more about this
capitalization bond concept though, since I hadn't seen it before.

------
fsewe20
Your FAQ says you use a third party that draws the random numbers. Is this
number drawing verifiable somewhere? Can you say anything about their
techniques?

~~~
adammoelis
The insurance company we work with that is responsible for paying out the
jackpot prize draws the winning numbers.

They have no access to the numbers users have selected, so it's completely
blind.

~~~
magicnubs
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 tempting for the insurance agency to
send you the drawn numbers even ever so slightly early and let you alert them
so they can redraw if the jackpot was ever awarded.

~~~
adammoelis
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 would be huge for us. That's why the number
drawing process is double blind. They choose the winning numbers and they
can't see the picks. We can't see the winning numbers but we can see the
picks.

Also since this type of insurance is purely mathematical, the risk doesn't
change for an insurer if someone wins, so the price wouldn't change either.
Unlike, say pet insurance, where if Bulldogs get sick more often than you
thought, the insurer simply mispriced the risk.

This type of insurance is impossible to misprice. It's almost like a casino
for the insurers. There is risk but no uncertainty of what the risk is and the
odds are in your favor when you write more premium.

~~~
schoen
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](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.

------
waterside81
FNB, a bank in South Africa, used to do something similar. It was called the
Million a Month account. If I recall the South African Supreme Court shut it
down because it was considered a lottery

~~~
adammoelis
Yeah we actually studied the FNB program when we were setting out to develop
Yotta. Basically, it got shut down because it got so popular in its ~2 years
of operation and was taking away from the National Lottery.

The difference in the U.S is that there has been legislation explicitly
supporting prize-linked savings, which didn't exist in South Africa. It was
more of a grey area there.

A great academic read on the FNB MaMa program here:
[http://beniverson.org/papers/MaMa.pdf](http://beniverson.org/papers/MaMa.pdf)

~~~
vdalal
I love the hack to lottery-fy savings.

Few comments:

1\. Product: It in the wide spectrum anywhere between savings account <->
lottery. In your mind, is it closer to one edge vs. other? \- Per my read and
based on the rate (0.2%) offered, it is closer to the lottery end

2\. Web page: "Savings + rate >15-100x banks + Win $10 mil" is what could be a
turn off. Depending on the answer above, fix the headline

3\. math on how this works: Show ONE public account with $ (say median of all
accounts on Yotta or $100 for simplicity) that you would fund and track it in
realtime with APY

4\. FAQ: Could be more direct. Yes, one will need a Yotta account

5\. FAQ: "3rd party “A” rated insurance carrier": May help you if you can
reveal who on your website & theirs too

6\. FAQ: In one answer, it say 15x and in another it say 20x (Chase or Wells
Fargo)

7\. 7 digits = 10 ^ 7 #s: if one can get 1000 users with $250K each, is the
$10 mil guaranteed? :)

Edit: for readability

~~~
adammoelis
Thanks for this.

1\. We don't really think of it as being closer to one vs the other. From a
front-end perspective, it's closer to a lottery/sweepstakes. But from a back-
end perspective it's more of a savings account with a twist. So maybe I'd say
right smack in the middle of that spectrum on a blended basis.

2\. Thanks for the feedback here

3\. Good idea. I like that

4\. Fair

5\. Agreed. Will update

6\. Thanks - will fix that

7\. I think your math is off on this one. Numbers are 1-70 and the special
number YottaBall is 1-25, so lots more combos than that.

------
bingdig
Why are you letting people without deposits get in on the drawings? Seems like
I could just spam you with mail and get a bunch of entries without depositing
savings, at the cost of users who are depositing.

From the website: > Mailing In. You can receive one (1) Ticket by sending a
handwritten sheet of paper with your name, address, e-mail, and phone number
to: 45 East 22nd St. #26B New York, NY 10010. For each completed sheet of
paper, you will receive one (1) Ticket. If you want to select your own numbers
you should include those numbers on the sheet of paper. If you do not provide
numbers, they will be randomly provided. Limit of one request per envelope.
The entry will award a Ticket for the drawing that starts on the next Monday,
after the mail in was received (not postmarked). ... Limit of 10,000 Tickets
per person per week, regardless of method of obtaining a Ticket.

~~~
adammoelis
For legal reasons, we need to have a mail-in option. It's called an AMOE
("Alternate Method of Entry").

We prohibit automated entries though and each mail-in entry needs to be
handwritten sent in its own envelope. The postage costs more than the EV of
one entry, so we don't expect this to be an issue.

~~~
davidclark22
First off, very cool idea. I'm a fintech PM and had the idea to build
something similar. Glad to see someone doing it!

From my research, it sounds like, because prize linked savings accounts are so
new in the US, it's unclear whether requiring someone to have an account would
count as consideration. By offering an AMOE are you taking a conservative
position on this until it's more clear? Or, has a judge/court ruled on this?

I was involved in a sweepstakes at a bank a couple years ago and we took a
similar route as you, offering a mail in AMOE, requiring handwritten entries.
Without any marketing, we received several thousand entries, mostly from
people who mail in entries to every sweepstakes they find.

~~~
adammoelis
Yes you're spot on. We are taking the conservative approach for now by
operating as a sweepstakes. We haven't had any issues with mail-in entries. I
suspect because in our case the EV of a single entry for a single week is less
than the postage cost.

~~~
abalaji
Haha I did the math on this for that exact reason. I guess it only makes sense
if you live in New York and can walk by the mailing address.

------
fatmandu
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!

~~~
adammoelis
For sure. These are all really interesting topics. We have thought about a lot
of this, but would love to chat in more depth. Shoot me an email at
adam@withyotta.com and let's connect to talk live.

------
davidajackson
Nice, by the way you could do the random number generation trustlessly, see
for example: [https://medium.com/@jgm.orinoco/participatory-random-
numbers...](https://medium.com/@jgm.orinoco/participatory-random-numbers-in-
ethereum-597769428)

~~~
adammoelis
Thanks for this. We'll look into it. Right now the numbers are selected by a
third party that has no access to user number picks, so it's totally blind.
But this could be useful for us in the future. Thanks for sharing.

------
Bookmaker12
I also think this is a great idea - I believe it is a good incentive for
financially weaker people to save and even for people with good control over
their financials this can be a fun way to "invest" the liquid cash balance,
given that it's FDIC insured (obviously, the bigger part of savings should be
invested in real estate, financial markets, etc.). Contrary to some comments
here, I don't see anything morally wrong with it.

I do have a couple of questions/concerns/comments, which I'm posting here for
everyone's benefit:

1) Have you thought about slowly increasing the jackpot as your customer base
grows? That would add another fun element to see the jackpot grow every time
nobody hits it (could be in very small steps)

2) Is there any way to verify your partnership with Evolve Bank, other than on
your own website? That would give me more peace of mind before depositing a
larger balance and recommending it.

3) I agree that posting the name of the insurance company would help trust in
the lottery system. Live drawings and/or the insurance company publishing the
numbers on their website will definitely help, too. Out of curiosity, given
that the insurance company doesn't know the picks beforehand, how do they
ensure that you don't alter a pick after the fact to hit the jackpot?

4) Privacy: I agree that the default setting should be invisible. Same goes
for friends, as the definition of "friend" seems to be anybody who has my
phone # in their contacts. I'd like the functionality of adding individual
people via an ID and/or QR Code for friendly competitions. Does the invisible
setting also allow to stay anonymous in the scenario of winning the jackpot?
The T&C's say otherwise but I wonder if it's legally possible for you to
disclose customer data without explicit consent (does accepting T&Cs count as
explicit consent)?

5) App User Experience: I'd keep the lottery results and winnings of the
current week on the main page until Sunday is over and reset on Monday. It was
a little weird at first to log in at 9:05PM on Sunday and see everything
blank. Also, a fingerprint/password prompt would increase the feeling of
security.

Curious to hear your feedback and awaiting tonight's numbers draw!

~~~
Robert22
I agree, mainly with #3. I think you have to post what insurance company is
covering you guys. People know that the Lottery is not rigged because they
have the state to back them up. In your case, you need the Insurance company
to back you up, and not naming them seems sketchy in my opinion. Best of luck
though, I think the overall idea makes sense.

------
onnnon
The grand prize will be paid as a one-time, lump sum payment of $5,800,000.
This is the current present cash value of a $10,000,00, 40 year annuity. The
odds of winning this amount are 1 in 3,277,899,625.

~~~
adjkant
For anyone that's curious, if you put enough money in to buy every single
possible ticket (81B), you would get about an APY of 0.00125% per week for an
annual APY of 0.06%

Not very useful but I guess if you have 81B in cash laying around, it makes
sense to put your money in Yotta over some large banks! Of course that should
probably not be in cash but hey, I'm not going to tell you what to do with
your 81B dollars.

~~~
adammoelis
We need to tell Jeff Bezos about this strategy

------
felixledem
Really interesting concept! Are you planning on adding index fund investing in
the future? It seems like you could incentivize investors to take a long term
view with a similar, gamified approach.

~~~
adammoelis
We haven't thought about this yet but that's interesting. What kind of index
fund gamification do you have in mind?

~~~
basch
There was a company, forcerank, that was fantasy stock market. Rank stocks
based on expected performance, and winner gets points, with cash prizes. They
ran into a little SEC trouble, so careful with gamificating investing.
[https://www.sec.gov/news/pressrelease/2016-216.html](https://www.sec.gov/news/pressrelease/2016-216.html)

That said, it was a fun idea. Instead of picking lottery numbers, ranking
tickers in the right order, and then pulling a date out of a hat? Something
that only operates on past data?

~~~
adammoelis
Interesting I'd never seen this. We will look into this for sure. Thanks for
sharing

------
thoughtstheseus
Maybe have the winners announced @ noon or something similar. I’m usually not
as engaged with friends/family at 9pm on a weeknight. I’d have the biggest
prize set for Friday. Why 9pm?

~~~
adammoelis
Thanks for the feedback. We chose 9pm thinking it would be a time when people
are less busy. HQ Trivia picked it and we thought it worked for them in terms
of getting engagement.

But to be fair, we didn't think too deeply about the exact time and probably
should have, so we will think about this some more.

------
3guk
Whilst I'm based in the UK and have access to (and use) Premium Bonds - this
seems like a fun product, congrats to you guys for making saving fun !

~~~
adammoelis
Thanks. We hope to create the same excitement in the U.S similar to Premium
Bonds!

------
oplav
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?

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

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

~~~
adammoelis
The monthly savings bonus also counts towards the $600

------
kentosi
I want to believe in it, but the skeptic in me wants to ask how this isn't a
vehicle for the rich to get richer: If every $25 gets you a ticket, then
someone with a $50 account has far worse odds than someone with a $5000
account.

Of course, the $50 person has nothing to lose, but there's also a sense of
dejection.

Perhaps a cap on the total number of tickets an account can have?

~~~
adammoelis
I see what you mean. This is a reality in a regular savings account too,
though. Accounts with higher balances earn more interest. With us, you earn
more tickets. Hopefully the incentive to get more tickets helps people start
building savings and they save more than they otherwise would have with a
vanilla savings account.

Someone else having more tickets than you doesn't really affect you other than
the potentially splitting the bigger prizes, but having more depositors also
helps us offer bigger prizes in the first place, so it's somewhat circular.

------
TheTaytay
I'm really glad to see someone doing this in the US - kudos. I remember being
so disappointed to hear in the podcast that this approach was illegal in the
US, and I didn't realized that changed back in 2015! I think this approach to
incentivizing savings is a net good for the reasons you stated. Congrats on
the launch. I wish you success!

~~~
adammoelis
Thank you!

------
shayankh
What I had a problem understanding is the worst case scenario, specifically
that wouldn't i better off by just going to Marcus or Ally? There i don't
"win" anything but in the long run the yields are worth it, which I don't get
from you?

~~~
gruez
I think someone did the math and the effective interest factoring in the
expected value of the prizes is just above 3%. That's significantly higher
than what you can get with a regular savings account.

[https://news.ycombinator.com/item?id=23781247](https://news.ycombinator.com/item?id=23781247)

------
shawnMer
Interesting you use Plaid as your only onboarding ramp. I am personally on
Morgan Stanley and am completely locked out of Plaid and have to do manual
entry. Have you thought about other "easy" money transfers such as Venmo, Cash
App, etc

~~~
adammoelis
Yeah we have thought about other ways to transfer and are constantly looking
into them. We want it to be as frictionless as possible.

We are considering rolling out the ability to fund accounts with debit cards
in the near future, but the transaction fees are quite high. That's the
drawback.

We would love to find a way to hook into Venmo or Cash App, but we've yet to
find a feasible way to make it work seamlessly. If anyone has ideas on how we
could do that, e-mail me at adam@withyotta.com as I would love to chat on this
topic.

------
onion2k
_over 23M people save through Premium Bonds (33% of the population) with over
$100B deposited._

Here in the UK it used to be common for children to receive premium bonds as
birthday gifts from grandparents who have no idea what children actually want.

~~~
danbolt
I was told by a high school teacher that he'd subsequently spend said bonds on
beer when he was in university.

~~~
adammoelis
Can you spend Premium Bonds?

~~~
djhworld
You can withdraw them as cash, each bond is worth £1, although it takes a few
days for them to send the money to your bank.

------
abalaji
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...](https://twitter.com/adithya_balaji/status/1275935655718195213?s=20)

~~~
adammoelis
This excludes any value from prizes, which is the bulk of the value of Yotta.
0.2% is what you get if you never win a prize, ever.

~~~
abalaji
I might get around to doing the math myself, but what would be the APY given
the expected earnings I calculated above with an average American savings
account of say $7,000.

~~~
adammoelis
The EV on an annualized basis is around 3% right now because we are
subsidizing some of the prizes currently. In the long run we will aim to match
Marcus and Ally, which right now are at around ~1% but go up or down depending
on market cycles.

~~~
gsurfs99
How long do you think you could sustain the ~ 3% rate before going down to 1%?
Please be honest : )

------
mathrawka
Sounds interesting, but seeing as you are a VC funded startup, I have some
reservations about this. How do you plan to sustain the business?

From the privacy policy, I see this:

> In addition, we may, from time to time, offer promotions with various
> businesses, websites, mobile applications or third parties, which may
> include opportunities for you to earn deposits within your Yotta account.

It sounds like you are just sharing our information with advertisers.

Edit: I know you addressed this in the post, but I don't see earning money on
interest in accounts as a very sustainable business from a VC point of view.

~~~
adammoelis
On the privacy policy front, this is somewhat boilerplate language that is
just there to allow us to have partnerships with other companies to attract
deposits, which we haven't explored yet. But we didn't mean for it to be
anything related to using information with advertisers.

On the VC side - the Premium Bond program has generated $100 billion in
deposits. The UK is a fifth the size of the U.S in terms of population.
Premium Bonds isn't completely apples to apples (it's run by the gov and has
been around for 60 years), but if we can capture Premium Bond magic in the US,
earning small interest on a massive deposit base can be a big business. We
also plan to offer other revenue-generating banking services as we grow, like
other neobanks have done.

------
tych0
> We provide a rate of return on savings that on average is in-line with the
> top yielding savings accounts out there like Marcus or Ally. You might get a
> higher return if you’re lucky and win more prizes than expected. You might
> get a lower return if you win fewer prizes than expected. Even in a worst
> case scenario where you never win a prize, you still have your savings.

Can you elaborate more on this? (Maybe you can't because of the SEC?) APY of
Ally is 1.0% right now, vs. 0.20%, so are the expected value of winnings 0.8%?

~~~
adammoelis
Yeah. Right now, the EV from prizes is actually higher than that. We are
subsidizing to provide an even better value for early users. But in the long
run, that's exactly right. The base rate plus prizes will be, on average, what
you would earn in a vanilla but high yielding HYSA

~~~
Jommi
Did some quick excel sketching here:
[https://docs.google.com/spreadsheets/d/17t00LzdgRcC8dtVKnTwK...](https://docs.google.com/spreadsheets/d/17t00LzdgRcC8dtVKnTwKxvP4GgiNuRqbYgP811LL19A/edit#gid=0)

Odds from here: [https://www.withyotta.com/official-
rules](https://www.withyotta.com/official-rules)

I might be completely wrong but looks like your estimate yield is heavily
dependent of amount of other people saving as well.

I bet the real model gets pretty damn interesting. Would love to get a closer
look for sure.

If you wanted to be a bit more "evil genius". It would be interesting if
somehow the money in the grandprize grew based on how many people
participated. This would give people incentive to join and lower the overall
EV for everyone, but also give you guys more funds to manage :)

~~~
lyrrad
A few errors in the spreadsheet:

\- Odds for the $0.20, $0.80 prizes are slightly off.

\- The $15 and below prizes are not split between participants, so one would
not need to consider the number of other entries for winning those prizes.

If one just considers the $15 and below prizes, I think the odds work out to
about 3.2% per year, making it about a 3.4% expected interest total.

~~~
Jommi
Thanks so much!

------
too_pricey
How are ya'll planning to adjust to changes in interest rates? Will prizes
become lower, rarer, will the base/worst case interest rate change first, etc?

For this to have the societal impact ya'll seem to want, it's going to need
high usage from people who probably have little experience with the changes in
the Fed rate and its impact on savings accounts. You obviously need to adjust
to this yourself, but I can see changes in lottery odds (or changes in prize
value) as being aggravating to users.

~~~
adammoelis
We want the bulk of our all-in value to come from prizes, since that's really
our differentiator. Should rates go down, we would likely lower the base rate
first. Should rates go up, prizes would be the first to go up.

------
fsewe20
For those interested in projects like this outside of the U.S there is a
similar decentralised version called pool together which uses the dai
stablecoin for tickets:
[https://www.pooltogether.com/](https://www.pooltogether.com/) with the code
open and auditable on github too.

If you are new to crypto you can access it easily using wallets like:
[https://www.argent.xyz/](https://www.argent.xyz/)

------
atlasunshrugged
This reminds me a bit of Long Game which I thought was super cool. Best of
luck!

[https://www.longgame.co/](https://www.longgame.co/)

~~~
adammoelis
Thanks! Yes Long Game is similar, but we are trying to take a much simpler and
more social product approach

------
kvee
I signed up and deposited $25 to test it out, with a recurring monthly $25
deposit.

Seeing that it's effectively a 3% interest rate, I'm now trying to deposit a
much larger amount.

However, it's infuriating to do so, because the only way I can figure out how
to deposit more money is in $25 increments.

I also can't figure out how to do a single deposit instead of a recurring
deposit.

Is there no way to enter the specific amount of money I want to deposit?

~~~
slymon99
On android at least, you can click to edit the number and manually type in
your larger amount

~~~
kvee
Thanks. It looks like you can on iOS too, though I would probably never
figured that out myself.

Turns out there's a $8000 deposit limit. Not sure if that is daily or what.

~~~
adammoelis
That is a daily limit. We have limits for fraud prevention reasons. Thanks for
the feedback on it not being clear you can type in a number. We should make
that clearer.

------
quickthrower2
When I saw the headline I was hoping that this was going to be an evolution of
the budgeting app.

I do budgeting using ledger cli and live it although it’s pretty manual and
would love a decent tool to do it.

None of the paid ones really draw me but if there was something really good in
this space I’d be interested.

Not sure if the solution but I imagine something that gives you virtual high
fives for saving instead of spending etc.

------
francescopnpn
How much does the insurance cost? Was it hard to find someone wiling to insure
that?

Finally, you pay 0.2% but Ally pays 1% yet you say your rates are as good.

~~~
adammoelis
On the interest rate side, the 0.20% is the base rate. If you win no prizes,
you get that. Prizes comprise the bulk of the value from Yotta. Your total
return is prizes + the base rate.

On the insurance side, there are specialty insurance companies that do this
kind of thing, similar to hole in one prizes or half court shot prizes at
sporting events.

We pay them a mark-up on expected value. Since the risk they're taking is
purely mathematical random chance, it's pretty much the best type of insurance
for someone to underwrite. There is no uncertainty about what the risk is to
them, unlike most other insurance where people are using actuaries to estimate
what the risk is, but it's not actually known for sure.

~~~
henryfjordan
Why bother insuring yourselves then? Just to cover yourselves incase you get
"unlucky"?

Couldn't you structure the contest so that you know you'd payout $X per week
and not need insurance?

~~~
francescopnpn
I guess people eventually could win twice in a short span if they're unlucky
and they'd be out of money

~~~
Bookmaker12
Even if somebody won the jackpot only once, I assume they'd be out of money by
far, which is why insurance is needed.

------
imtavi
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.

~~~
adammoelis
Thanks for this feedback.

Did you know that this is only to show your first name on a leaderboard if you
win prizes above a certain threshold or did you take this to mean something
else?

Wondering if it's an issue of it not being clear what it means or if even
knowing what it means, it still is a privacy concern for you.

~~~
imtavi
I figured that it would allow my name to be shown upon winning any prizes,
although there being a threshold doesn't impact my feelings about it. Either
way, I'm not interested in people knowing anything about my savings, and I was
surprised that this was default-on and buried in the Privacy section, where I
only had clicked out of curiosity.

~~~
adammoelis
Makes sense. We will look into making this option clearer to the user so they
have to explicitly choose which option they want.

~~~
imtavi
That's good to hear; thanks for the quick response.

(As for the first name thing, just FYI: in my case, my first name + last
initial fully identify me.)

~~~
adammoelis
Ah that makes a lot of sense. Would first name alone be fine? Is it the combo
that is problematic?

~~~
imtavi
In my case, there are only a handful of Tavi's in the world; first name alone
would be better than the combo, but still not great and I would still always
want to opt out.

------
elektor
This is a very cool idea, Adam and Ben.

I have one minor feedback: On the bank comparison portion of the site, you
list Marcus as having 1.7% APY, when it is actually 1.05% APY. These savings
rate having been pretty volatile in the past few months so it's understandable
but I figure updating it to its current % makes your product look even better
in comparison.

~~~
adammoelis
Thanks for flagging this. We will update these numbers, since you're right
they have changed a lot recently

------
imglorp
People that like this idea might check out Acorns. They employ similar methods
to nudge people into helping themselves save more. One example is rounding up
purchases to the nearest dollar and investing the change. Their mission
statement is aimed at "up and coming investors" and is kind and heartfelt.
Src: Used to work there.

------
jedberg
Have you contacted Dubner about this? He'd probably love to have you on his
show. Would be great marketing for you.

~~~
adammoelis
Not yet, but we have plans to.

------
shustrik
How can one ascertain that funds are insured by FDIC up to 250K$ for each
depositor? You’re not an FDIC-insured bank, and I assume that from Evolve’s
perspective the only depositor is Yotta, so if Evolve fails, FDIC would only
pay out Yotta 250K$ total, not upto 250K$ per Yotta customer?

~~~
adammoelis
Every account holder has up to $250k in coverage from the FDIC. This is
individually, not in aggregate. We say this on our website, but anyone who
wants further confirmation could email Evolve directly and they would confirm
this.

~~~
shustrik
Thanks for the response. I contacted Evolve directly as you advised. They
responded "Yotta Savings is not a direct Evolve customer. They are linked to
our bank through our financial partner, Synapse. You will have to contact
Synapse so they can better assist you."

So I'm unable to get confirmation from the FDIC-insured bank that you're using
that their FDIC insurance extends to your customers. Sure, I can contact
Synapse, but I don't know why I should trust what they say any more than what
Yotta says - Synapse isn't FDIC-insured either.

While looking for this, I also found a medium post by Beam
([https://blog.meetbeam.com/a-primer-on-fdic-
insurance-72fe688...](https://blog.meetbeam.com/a-primer-on-fdic-
insurance-72fe688fd20b)) who explain how their savings accounts are FDIC-
insured upto $250,000 for every customer - they would open an account in every
user's name at Evolve bank. Perhaps it would help you gain more trust if you
did a similar post.

~~~
adammoelis
Thanks for this. It seems some people have reached out to Evolve and Evolve
has confirmed the partnership, so it's probably just a different agent you got
that pointed you to Synapse. We do partner with Evolve through Synapse.

Good idea on the blog post. I think we will do a post like that.

~~~
zavex79
Did you end up doing this blog? Not seeing it on your blog.

------
pcmaffey
Note that as soon as you accept any winnings you give Yotta full right to use
your name and city for marketing.

~~~
adammoelis
We only use first names and last initials along with cities for social proof
to show that people are winning.

We do allow you to be completely anonymous from the privacy settings within
the app. If you don't want your first name, last initial, and city shown
anywhere, you can toggle it off.

~~~
aerospace_guy
Why not make it opt-in rather than opt-out?

~~~
adammoelis
We find most people aren't sensitive about the first name last initial thing,
and it helps us in terms of social proof. If we get complaints, we could swap
to opt-in vs. opt-out.

------
hrishios
Love the interactive bank interest rate checker on your homepage. It's always
nice to see some interactivity that's relevant to the product, as opposed to
floating d3 visualusations that have nothing to do what's actually on the page
and serve to use up my battery.

------
frakkingcylons
Sounds like a great idea, I made an account. I was looking at the official
rules and noticed the mail-in option to get tickets. Was it a regulatory
requirement to provide a way to get tickets without deposits?

~~~
adammoelis
Yeah. In order to offer prizes via a game of chance, you can't require
"consideration" and so there needs to be a way to enter for free

~~~
gruez
I wonder how effective that is. eg. you can make it so you get 1 entry for
free, but make it so you get 1000 entries per $1 deposited so all the free
contestants get buried by all the paid contestants who have millions of
entries.

~~~
adammoelis
Yeah the lower the dollars saved per ticket, the less valuable the free
entries. You're 100% right on that point

------
jonwalch
This is the best fintech app I've ever seen. If y'all could get the interest
rate up, there would be no reason not to use this. I'm not using this today
because I get 1.05% with Marcus.

~~~
adammoelis
There's some confusion we probably need to clear up on what our "rate" is. Our
base rate if you win no prizes ever is 0.20%. Including the expected value of
prizes it's above Marcus today.

~~~
jonwalch
Yeah I would change your home page to put your "rate" with some way to denote
that the interest rate + EV is better than competitors, instead of putting
just the base rate.

~~~
adammoelis
Good idea. Trying some changes to help with this.

------
RhysU
How does your payout structure look vs the alternative of saving and buying
lottery tickets with equivalent payout odds? That is, relative to a two-legged
financial equivalent how expensive is Yotta?

~~~
adammoelis
Is the alternative you're referring to here saving money and using the
interest generated to buy traditional lottery tickets?

~~~
RhysU
Yes, presumably it should be more efficient because this company is not taking
a cut.

Saving less and using the remainder to buy tickets is another possibility. No
need to wait until the tickets are interest financed.

~~~
adammoelis
I think we would be the better option on an EV basis than going that route.
The lottery takes an absurd cut since they are a monopoly. It's pretty much
the worst EV gamble you can make. If you factor in taxes, annuity present
values, odds of splitting prizes, The lottery takes around 50% as their cut.

~~~
RhysU
The EV is overwhelmingly driven by savings and interest. The variance is from
the lottery. Remember, the "product" is the variance people experience.

Buy enough lotto tickets to match the (appropriately normalized) variance
Yotta provides. Then calculate whether full-amount-in-Yotta or lotto+residual-
savings has higher EV.

------
arosier
How does users being able to withdraw their money immediately affect your
business model? How are you preventing someone from depositing/withdrawing the
same $25 a billion times per week?

~~~
adammoelis
There is a federal requirement with savings accounts that you can only make 6
withdrawals per month. Right now that has been lifted due to covid, so there
is no limit.

If you withdraw, you lose tickets so that is a deterrent to continuing to
deposit and withdraw to game the system

~~~
mrjaeger
Is there a limit to the amount of money you can withdraw at once?

~~~
adammoelis
Yes. This is for fraud protection reasons. The way ACH works is pretty crazy
and is easy to commit fraud with.

Right now it's $2,000 per day. If you want to withdraw more than $2,000 per
day, you can upload a driver's license to verify your identity (prevents
fraud) and then you can withdraw up to $100,000 per day.

------
dyeje
I'm surprised the play here is to make your own bank rather than integrate
existing banks. I've never worked in finance though, maybe integrating with
banks is a PITA.

~~~
whoisjuan
Well this is a lottery basically. Doubt it that you can create the margins
needed for the payout by integrating with banks.

The business models here is to be a bank that raffles money based on your
deposits. And they need to hold that money to generate the profits to support
those payouts.

It's quite clever. This fully disrupts businesses like scratch tickets which
are quite popular (haven't seen one gas station that doesn't sell them).

I actually wish I had this idea. It's super smart. My only doubt is that this
model apparently doesn't scale just with holding money. Digit tried that for a
while and then they start charging for their sevice.

------
ctchocula
Great service! Is there a way to link more than 1 bank account? There doesn't
seem to be a button to 'Add Account' once I have linked 1 account already.

~~~
aphit
I'm wondering this as well--I wonder if the only way it is possible is by
contacting customer service to unlink the first account and link a new one.

~~~
adammoelis
Unfortunately right now we are preventing fraud risk by only allowing one
connected account at a time. You'd be surprised how often people try to commit
fraud in banking apps.

------
mdu96
This is a great idea. Congrats Adam & team on launching.

~~~
adammoelis
Thanks - hope you check it out

------
zbruhnke
Hey guys please don’t take this the wrong way but as a consumer when I saw the
behavioral psychology headline in this post I got really excited.

Suffice it to say I was sufficiently disappointed to find out it was a prize
linked savings account ... these have been run in the US for years, one of the
largest in the US right now Is run by wal mart.

I LOVE nudge and I love behavioral psychology but this is not that.

Check out what we’re building at HMBradley if you want to see a real nod to
creating habits.

I was hoping to see a new and interesting take here so I’m kind of curious why
you settled on this angle?

~~~
adammoelis
We don't think anyone has done prize-linked savings the right way in the U.S.
There were many search engines before Google and social networks before
Facebook. We think it's mostly about execution here, and prize-linked savings
is a broad term and there are lots of ways to wrap a prize-linked savings
product.

Walmart has a huge distribution advantage over startups which has allowed
their program to become the biggest, but there's really no front-end, mobile-
first approach, and not much fun gamification to it. We also don't think the
few startups that have tried something in this space have taken the right
approach either by making their products overly complicated, among other
things.

------
sherlock_h
I sign up for this about 5 weeks ago with a deposit of $100 and won $0.63. On
an annualized basis that would be around 6%. Guess I‘m a lucky guy!

------
Ian999
Hey Adam - what does "funding a jackpot via insurance" mean? Do you pay out
$10m jackpots now or only when you hit a certain scale?

~~~
adammoelis
We pay premiums to an insurance co. and in the event someone wins the jackpot,
the prize payment would come from them, not from Yotta.

------
Q6T46nT668w6i3m
Hi, I’m reading the rules. How do you define automated?

> Use of any automated system to enter is prohibited and will result in
> disqualification.

~~~
adammoelis
Using bots to write and send in mail-in entries is prohibited

------
physixfan
Are you going to change the prizes and odds every week? Is the EV next week
still going to be the same as this week?

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amellin794
One of those brilliantly simple ideas, I'm already in for 10 tickets and have
shared it with a bunch of friends.

~~~
pinfisher
You sound like a shill.

~~~
frakkingcylons
From the comment guidelines:
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

> Please don't post insinuations about astroturfing, shilling, brigading,
> foreign agents and the like. It degrades discussion and is usually mistaken.

------
jgalt212
Give where interest rates are, young people should be borrowing more (but not
student debt), not saving more.

~~~
adammoelis
While it's a good time to borrow, you still need accessible cash saved up for
an emergency no matter what.

~~~
shawnk
Hey Adam, I am Shawn. Are you guys open to bringing on affiliates? Would love
to speak with you guys to promote this great app.

~~~
adammoelis
Open to chatting. Email me at adam@withyotta.com

------
Douger
Nice! This exists in New Zealand as Bonus Bonds as well. They're quite often
given as savings gifts.

All the best!

~~~
adammoelis
Yes we did come across Bonus Bonds as well! They are almost as big in New
Zealand I think as they are in the UK, with around 33% of the population
participating. Also run by the gov.

------
iudqnolq
Do you have research that $.1 winnings motivate instead of just disappointing
people?

~~~
adammoelis
It's not the 10 cent prize that's motivating to people. It's the chance to win
big. And in this care, no risk of loss, other than opportunity cost.

------
coinward
Im doing something similar with bitcoin instead of FDIC member banks.
Playswym.com

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grok22
My company is blocking your site as a gambling site! Isn’t that a big red-
flag?

~~~
adammoelis
No this is just a mis-categorization of our site. We are not a gambling site.

We've been trying to fix this issue. I think because of some of the language
on our site ("win prizes" etc.) we have been improperly categorized as a
gambling site by automated scrapers, and some corporate internet providers
block gambling sites. That's all that is.

~~~
simonebrunozzi
I'm sorry to be that guy, but the way I see your service is exactly like a
gambling site.

The interest you pay is lower than inflation, meaning that I am giving you
money to buy the chance of winning a big prize.

That's gambling.

You can genuinely think that you will be helping the world, I am not
questioning your ethics because I don't know you.

But I don't agree with you. I fundamentally believe that what you are offering
is, in aggregate, bad for the world.

~~~
grok22
Not sure why you feel that way -- I don't see it as a gambling site because
you aren't losing your money to someone else. The interest seems in line with
other saving accounts while having some incentive to encourage saving more?
Overall good for you in the long run, isn't it? Inspite of any compulsions to
gambling you might have.

Edit: Editing to also say that enticing you to tune in to look at weekly
results doesn't help I guess and makes it feel like something you could get
addicted to and emotionally frustrated when you don't win? In that sense maybe
not good?

~~~
simonebrunozzi
You are correct, pushing you to tune in regularly is one of the worst part for
me.

------
moneywoes
Can I open a account if I'm an American citizen living outside of the US?

~~~
adammoelis
Yes you can, but to win the jackpot prize (paid by an insurance company) you
have to be considered a "resident" of the U.S. I'm not sure if a citizen
automatically means you're considered a resident. But you can win all other
prizes as well as the savings bonus.

------
librish
Are you planning on integrating with tax reporting tools such as TurboTax?

~~~
adammoelis
Not at the moment. Would that be useful for you?

------
qwerty456127
Nobody should be "saving" anything beyond ~twice the month income amount.
People should invest the rest instead. Putting money on hold means getting the
whole idea of money wrong. Money is not a value itself, it's a productivity
measurement unit.

~~~
rhys91
This is an over simplistic view that applies broad strokes. I hold the view
that cash flow is king. Without having significantly more than 'twice the
month income' right now I would be unable to pay my rent and bills and be
forced to pick up lower income work at the opportunity cost of finding a new
job that's in line with my career.

------
jyriand
Does this app only work in certain countries? Edit: great idea

~~~
adammoelis
You have to be a U.S resident in order to win prizes right now unfortunately,
so basically yes

~~~
Jommi
How do you check eligibility?

~~~
adammoelis
We don't verify for the smaller prizes. For bigger prizes, we verify after the
fact and confirm with the winner.

------
howon92
I love the concept!

~~~
adammoelis
Thanks! Hope you check it out

------
coinward
How often does the prize get awarded out

~~~
adammoelis
Prizes are every week. Sunday nights the prizes get paid out

------
poma88
Does it work worldwide?

~~~
adammoelis
Only in the US right now

------
icedchai
Can I transfer my deposit out, then transfer it back in to get additional
tickets?

~~~
adammoelis
No - you would lose tickets on the withdrawal and get new ones on the deposit

------
zerowangtwo
Are you Ken Moelis' son?

------
thdxr
Genius!

------
Feolkin
This seems like a very cool way to tap into the dopamine reward system to
encourage positive behavior (saving more money). For people who don't have
savings and have a very high rate of temporal discounting and high
impulsivity, this could be a huge deal. Looking forward to seeing how this
continues to develop.

~~~
adammoelis
Yeah some stats say 40% of Americans can't come up with $400 in an emergency,
but the average household spends $640/yr on the lottery.

------
pinfisher
"Win up to $10 million by saving in an FDIC insured account."

I see that . Sounds scammy and gimmicky. Close page.

~~~
adammoelis
We have had this issue for sure, and it's a great point. Any suggestions to
help us make it sound less scammy but that also communicates something
similar?

