Money As A Motivator

I have seen a lot of business ideas lately using money as a way to motivate users to submit content and participate in the community. But I keep asking myself, is money really a viable option to build a social network or online community?

Here are some examples of companies that are using, or have used, money as a motivator:

Revver and MetaCafe – Advertising sharing based on the number of views a users video gets.

Dovetail.tv – Pays $.10 every time someone downloads a users video.

Yelp – Paid users $1 per post at the beginning. No longer do this.

Xuqa – Pays users $1000 if they reach level 10 popularity

Threadless – Pays users $2000 if their t-shirt design is one of the top rated

Daytipper – Pays users $3 to submit a useful tip

Epinions – Pays you for your reviews based on user views.

Why Money Doesn’t Work as Motivation

1. The money is rarely worth the effort of contribution.

In most cases, the time it takes to contribute to a community isn’t even near worth the dollars a user receives in return. For example, how long do you think it took a person to write 20 quality reviews for Yelp for $20 dollars? How many times have you heard anyone making tons of money off of Revver or MetaCafe?

If a persons initial reasons to participate in something don’t justify the time and effort it takes to participate, then they won’t continue to participate. In other words, if the initial reason for a user to participate in a community is money, but they don’t make enough money to justify their time, then they won’t participate

This is exactly the reason why most people who originally start a blog because they think they can make money, usually don’t last for more then a couple months.

2. There are other motivations that users find more valuable.

Most users participate in online communities because there are other motivations. Myspace and Purevolume provide a platform for artists to reach thousands of new listeners and build a fan base. Facebook provides a platform that allows college students to easily connect and stay in contact with new and old friends. Yelp provides a platform for users to share inside tips on restaurants and bars, and in return receive other great tips from other users.

All of these things are very valuable to the users who are active in those communities. And without those platforms, those benefits would not be possible.

How Money as a Motivator Can Work

1. Money isn’t the only, or primary motivator.

Related to number one on my previous list, “the money is rarely worth the effort of contribution,” for using money as a motivator there must be some other community motivations. Take for example, Threadless.com, a very successful community. Yes, they pay users who submit top rated t-shirts money, but Threadless provides the necessary tools to give winners and non-winners to receive feedback and suggestions on design, and interact with the design community. To many, this is much more valuable, entertaining, and useful to them.

2. Making money is an indirect motivator.

Money can be an indirect benefit of participating in a social network. For example, by participating on LinkedIn you might get a job offer. Or, according to the ActiveRain founder, Matt Heaton, many of his members receive new clients indirectly from participating on the site. But if you notice, both of these networks don’t advertise themselves as “participate and you’ll make money.” Going back to number one on this list, there need to be other primary non-monetary benefits of participating in the network.

Bottom line…in my opinion money can not be used as a motivator to build a successful online community, however it can be used as a supplemental feature once the community is thriving.

[tags]Social Networking, Social Network, Online Community, Community Building, Facebook, Myspace, MetaCafe, Revver, Brian Balfour[/tags]