INNOVATORS

Becoming popular is an app developer’s dream, but attracting too many users forces Qriket to refocus on staying small and local

Attracting too many users forces Qriket to refocus its app.

Most new mobile app developers dream of signing up lots of users from around the world, but for Jonny Comparelli’s Qriket, it was a problem. That’s because Qriket has an unusual business model: it gives away money.

Every day, 40% of Qriket’s revenue goes back to its users, who get to spin a wheel for a chance to win cash prizes and earn additional spins for doing things such as watching advertisements and shopping at participating stores. People from Spain to Singapore hopped on the bandwagon. But the more people signed up, the more money Qriket had to give away.

As a result, Comparelli decided to go against conventional wisdom in tech and instead of thinking big, he went local. “It seems everybody’s aiming to go viral. I really think that’s a really dangerous misconception in the industry,” he says. “That would hurt us if we weren’t prepared.”

Comparelli and his co-founders incorporated Qriket in 2010, when apps such as Foursquare, which encourage users to compete for “check-in” points, were gaining popularity. A teenager at the time, the now 23- year-old says he saw an opportunity to hook more people by offering a concrete reward instead of points and badges. “When you step up to the plate with something so tangible like money, it’s a refreshing change,” he says. “We want to improve people’s lives and help them buy a pack of water or get on the subway.”

The app launched in 2012 and makes money from businesses that pay to target ads and deals at Qriket’s users. Based in Toronto, Qriket had the most success signing up local businesses, particularly those interested in targeting users from Toronto, not halfway around the world. Meanwhile, the app was paying out cold, hard cash to everyone, including the harder-to-monetize international users.

Qriket decided to focus on building its business and making the app more fun and useful for customers in Toronto and New York City. People from around the world can still sign up and get a set number of daily free spins for cash, but they don’t get as many offers, deals and bonus spins. “We’re progressing really on a city-by-city basis,” Comparelli says. “The further away you are, the less of the Qriket experience you’re going to get.”

That focus has served Qriket well. Comparelli won’t reveal the company’s revenues, but says the app boasts about 150,000 active Canadian monthly users, 80% of whom use the app 20 out of 30 days. The next step for the app is the Qriket MasterCard, which launched in July. About 200 Toronto businesses have signed up to offer spins to Qriket users who make purchases using the card.

Qriket offers businesses what Comparelli calls the “holy grail” metric: figuring out what consumers respond to, what purchases they make and when they make them. Customers win, too, when they spin the wheel for prizes. “We value having a product that people come to every day and use every day,” Comparelli says. “It’s important to us to have something that integrates into people’s everyday lives.”