SteemFest4: Steem as a platform for business
Having a good time at #SteemFest4 with the old and new friends!
Thank you @roelandp for bringing the Steemians together, organizing one of my favorite events and taking such good care of us!
What is so cool about #SteemFest is the incredible atmosphere of cooperation. It doesn't matter if you build applications, create or curate content, play games or educate others about Steem. We really benefit from each other's success and I feel very privileged to be part of this unique and vibrant community.
A year ago, in #Krakow, I shared with the community the vision of the Waivio platform and associated protocols. And now, in November 2019, in #Bangkok, I am pleased to present the results of the hard work of the dedicated Waivio DevOps team - Waivio platform and to discuss immediate business applications, such as managing restaurant rewards programs.
Video feed: SteemFest⁴ - Bangkok - Day 1 - YouTube (3:07:00)
We are all very passionate about Steem and we certainly wondered how we could build an independent, profitable and stable business on Steem, a business that would not depend on the price of STEEM, that would not rely on a mass adoption of Steem, that could be launched with minimal investment and that would not require a degree in IT or journalism to run.
Most of us have published food and restaurant reviews on social media or on sites such as TripAdvisor, Yelp or Google Maps:
But this time, I would like you to look at these contributions from a different perspective:
Example: Favourite vegan place in Vancouver
Yes, these posts are also a perfect proof of sale!
Two original photos of the dish can be used to confirm that the person has visited the place and paid for the meal.
This simple concept is the foundation of a very popular business model, aka "bring me the customer and I will pay you a commission":
If the Guide can prove to the restaurant that the new customer has come and ordered the dish because of their efforts, they can collect the commission and then share it with the customer.
So, would you write a quick review for, say, $3, $5, $8?
Example: go to page Beef Teriyaki at Suhi Mura and click "Write new review"
And the focus of the review is on the photos, not the text. If you feel like telling a longer story, by all means do it - your fans will certainly appreciate it! But this is not a requirement.
The links to the dish and restaurant will already be included in the review template, so there is no need to worry about that.
First of all, how can we ensure that paid reviews are not biased?
In fact, it's very simple: rewards should not be offered by restaurants, but by independent review services, which aggregate many such offers. This would allow authors to provide honest feedback.
Once the review is posted on Steem blockchain, it would appear in the general news feed, in the author's personal blog as well as in the restaurant and dish pages.
This way, other users will be able to see real-life photos and ratings of dishes as part of the restaurant menu.
The main value proposition of the service is to replace coupons with rebates, or as we are going to call them - rewards. And while users effectively receive the same benefits from the pure financial point of view, there are significant advantages for users.
Coupons and discounts in restaurants are becoming increasingly difficult for people to manage. And people often complain that they receive "second class" service when they use coupons.
Rewards solve all these problems. Rewards can be easily aggregated from multiple sources and customized according to the user's needs.
And since the customer pays the full price in the restaurant, they always receive the full service and attention.
Finally, writing reviews is an aspirational activity, because it helps others discover great experiences, while allowing the author to build their reputation and social capital.
There are also important benefits for restaurants. First, this program allows restaurants to pay only for the results. Overhead management costs are eliminated as well as employee fraud (when employees replace cash payments with coupons) is greatly reduced.
Coupons are also very difficult to target. Coupons are often accumulated by existing clients, unnecessarily increasing the cost of acquiring new customers.
In contrast, restaurants can configure the frequency with which the same customer can become eligible to receive rewards, focusing campaigns on new and lapsed customers.
Frequent discounts can also harm the restaurant's brand, while reward programs require customers to pay the full price at the restaurant.
The next important question is: what kind of commissions can restaurants afford to pay on a continuous basis?
Analysis of the income statement of a typical restaurant suggests that they should be comfortable to offer up to 35% commission off the retail price of the specific dish being reviewed. Customers pay the full price for the other items they order and their friends (people rarely come alone) also pay the full price for their meals.
Guides (agents who manage restaurant rewards programs) are expected to retain 25% of these commissions, while 75% will be distributed to customers as rewards for writing quick reviews of dishes.
There are more than one million restaurants in the United States and their annual sales are approximately $900,000. A typical restaurant records $27,000 in claimed discounts and coupons in their cash register each year.
And if the coupons can be largely replaced by the rewards campaign at a restaurant, the guide can expect to receive $500 per month in management fees.
Providing such a service to just 20 restaurants could generate an attractive income, which would not depend on the price of STEEM, since the rewards are expected to be distributed within a relatively short period of time. And guides do not need large quantities of STEEM to successfully operate such a business on the Steem blockchain.
But how difficult is it to sell this service to restaurants?
In fact, the guide does not sell the program to restaurants, but rather offers to buy "empty tables". Many restaurants enjoy full occupancy on Fridays and Saturdays, but they may have unoccupied tables on other days of the week.
The next step is to establish two levels of rewards: a smaller reward for cheaper dishes and a higher reward for more expensive ones.
The billing cycle is generally defined by the distribution of rewards from the prepaid fund rather than by predetermined time intervals. Once the fund is distributed, the guide provides detailed reports and the cycle is renewed.
Steem blockchain offers complete transparency not only for user-submitted reviews, their social reputation and domain expertise, but also for all the payments made by the guide to customers.
But what if there are not enough existing Steem users in the area?
Today, one in ten people in the United States dine out every day. And this trend is particularly strong among the milennials, who are also technically savvy and price-conscious.
This means that the guide does not need thousands or tens of thousands of active users to run a successful business.
And locating local foodies through traditional GEO advertising is relatively simple, especially considering that the guide does not sell, but buys services from users.
Indeed, it is a very unique business, because the guide buys services from both restaurants and users!
But isn't this market already highly competitive and overcrowded?
Although TripAdvisor, Yelp and Google Maps dominate the market, they do not offer any tangible rewards to users. Waivio also focuses on photos and short reviews of dishes rather than long reviews of restaurants. This allows restaurants to compete for top positions using every single item on their menu, instead of just at the brand level.
Daily deals services, such as Groupon and livingsocial, require deep and unsustainable discounts from restaurants. While rewards programs are designed as continuous programs that can be tailored to the ongoing needs of restaurants.
In addition to managing rewards programs, guides will be able to provide additional services to restaurants, such as hosting their websites.
The restaurant pages on the Waivio platform are very dynamic, visually appealing and offer many options for social engagement, while the majority of existing restaurant websites are static and do not offer any compelling options for user engagement.
Updated menus (with user reviews, photos, ratings and tags) can also be synchronized with food delivery apps, table reservation services and other review services.
And on top of that, Steem's proof-of-brain consensus can offer another very unique source of income:
When guides convert fiat commissions into liquid STEEM rewards for distribution to reviewers, they do an extremely important job for the Steem community - they create a continuous cash demand for STEEM.
A single guide, managing rewards programs for just 20 restaurants can create positive demand for STEEM at the level of over $30,000 per month!
This commercial activity can lead to a rapid appreciation of the price of STEEM, which is in the best interest of the major STEEM holders.
Steem whales can directly support this commercial activity by using Waivio's matchbot service, which can be used to match liquid rewards with rewards from the Steem rewards pool (ex. 20% match) through upvoting of eligible reviews.
This way reviewers will receive 20% in the form of Steem VP and 80% in the liquid form paid by the guide.
The increase in profitability would motivate existing guides to expand their operations and attract many new guides to launch their businesses on Steem blockchain.
If you like what we do and if you think we deserve to receive some funding from the Steem Development Fund, please support Waivio on the Steem Proposals System. Every vote counts!
We firmly believe that Steem is the best open blockchain out there and that it is a perfect decentralized platform for business.
We also believe that the appreciation of the value of STEEM will result from businesses using Steem blockchain rather than just speculators making their bets.
And if you agree with our vision and think we are on the right track, please vote for the Waivio proposal: Steem as a platform for business using your favorite app: