Esprit Venture Challenge: xBuzz
A shocking 78% of Americans live paycheck to paycheck and many can't afford an unexpected expense of $400. Most could save more, yet they give into temptation and engage in $1 trillion in impulse spending, even though they know better, just as millions wish to lose weight and yet eat more than they should. Solving the savings crisis isn't easy since merely educating people about the issue isn't enough, just as telling people to diet isn't enough to solve the obesity crisis.
Nobel prize winning economist Richard Thaler and Harvard professor Cass Sunstein explain people can be helped by nudging them at just the right moment to remind them to do the right thing. Most people rely on alarm clocks buzzing to wake them, and calendar apps or watches buzzing to remember to get to meetings. The problem is, how do we incorporate this research into a savings app?
xBuzz solves this problem. Even if we aren't actually spending addicts, many of us are tempted by sales to walk into our favorite store and buy things we don't need. Imagine if instead, you had a virtual assistant that could nudge you before you purchased on impulse?
The app has a nudge feature that is programmed to nudge the user by category. Categories include salons, bars, restaurants, retail shops, grocery stores and others. You can select as many categories as you like. If coffee shops are your category, whether you are in Chicago or Denver, the app will nudge you while in a coffee shop, suggesting you save money. The nudge is not meant to be an “either or,” rather, you can reduce your spending, by purchasing a drip coffee, or you can indulge in your savings goals by adding money to that account as you sip your latte. Once nudged, you can select the dollar amount you wish to save, and the amount is immediately transferred to your savings account, where you save for your goals.
There are many savings apps available today. Rounding up your change is a nice start, but this method does not create awareness around savings goals and impulse shopping. There are no apps today that actually nudge the consumer before they spend, making them aware of their savings goals and allowing them to save at the push of a button. This is what xBuzz does.
You get asked at checkouts all the time to donate to charities. Why? Because it works. When you are spending money it’s a good time to ask you to give money for a good cause. It’s also a good time to ask you to save money. We think saving money is also an important cause, and intend xBuzz to become just as widespread as checkout charities.
xBuzz is a Freemium business model (B2C). The basic nudge will be free, with ads to finance that portion of our business. The premium user will have more beneficial (targeted) ads as well as enhanced data services. For example, the premium user will get a weekly report with the number of times they shopped by category, the number of times they saved, and recommendations for future categories based on shopping data.
xBuzz is currently working with a potential channel partner for Community Banks. The partner would like to co-brand xBuzz by reselling the app to the banks for its customers. The channel partner overcomes the issues banks have with regulations and security of today’s Fintech offerings, while at the same time offering the banks innovative solutions that they can’t otherwise produce.
The beta version with an enabled nudge is about to be launched (September 2019). Our beta testers are ready to go once launched.
As a finer note, the app is including several features with women in mind. The app will include a social piece and specific features that incorporate empathy, specifically to address the needs of women.
Click here to view their website.
About the Founders
Patty Ferreira, CEO: Patty Ferreira has been an entrepreneur for over 10 years. She has founded and collaborated with several startups, with one exit. Patty has held senior level management roles in product management, business development and strategy at Quantum, HP and MessageMedia. She is a patented engineer and has an MBA from MIT and an MS/BS Chemical Engineering. Patty was the President/Chair of the Boulder Business Series and President of Open House Grenoble, an expat organization in France. xBuzz stems from a prior business she founded, called Foops, teaching kids about money.
Lisa Calkins, CTO: Lisa recently sold her software development firm, Amadeus Consulting, where she created websites and apps for startups for over 20 years. Most recently she founded a blockchain app development firm, Halfblast. Lisa has a BS Computer Engineering from U. Chicago at Urbana-Champagne. Patty has known Lisa for over 15 years.
Kim Hedberg, COO: Kim has worked in Finance and Operations with startups for over 20 years. She is currently an Adjunct Professor at CU Denver and has an MBA from CU, Leeds School of Business. Kim co-led the Boulder Business Series with Patty and they have worked together on consulting projects over the last 20 years.