Variable Reward Quote by Nir Eyal

““At first, Mahalo garnered significant attention and traffic. At its high point, 14.1 million users worldwide visited the site monthly.[lxxxix] But over time, users began to lose interest. Although the payout of the bounties were variable, somehow users did not find the monetary rewards enticing enough. But as Mahalo struggled to retain users, another Q&A site began to boom. Quora, launched in 2010 by two former Facebook employees, quickly grew in popularity. Unlike Mahalo, Quora did not offer a single cent to anyone answering user questions. Why, then, have users stayed highly engaged with Quora, but not with Mahalo, despite its variable monetary rewards? In Mahalo’s case, executives assumed that paying users would drive repeat engagement with the site. After all, people like money, right? Unfortunately, Mahalo had an incomplete understanding of its users’ drivers. Ultimately, the company found that people did not want to use a Q&A site to make money. If the trigger was a desire for monetary rewards, the user was better off spending their time earning an hourly wage. And if the payouts were meant to take the form of a game, like a slot machine, then the rewards came far too infrequently and were too small to matter. However, Quora demonstrated that social rewards and the variable reinforcement of recognition from peers proved to be much more frequent and salient motivators. Quora instituted an upvoting system that reports user satisfaction with answers and provides a steady stream of social feedback. Quora’s social rewards have proven more attractive than Mahalo’s monetary rewards. Only by understanding what truly matters to users can a company correctly match the right variable reward to their intended behavior.””

— Nir Eyal