Do you have a testimonials section on your site entitled "why I yotta" and make your customers talk like the three stooges when giving them?

If not, why not?

Sorry. I'll show myself out.

We are working on improving our testimonials on our website for sure!

The key thing is “Why I Yotta”.

I like that as a slogan

[deleted]

u/OTS is

How did you convince your partner bank to go along with prize linked savings or were they familiar?

They weren't familiar at first, but after explaining exactly how it works (it's really no different fundamentally from a business model perspective as a normal savings account) and showing the success of similar products in other countries, like Premium Bonds in the UK, Bonus Bonds in New Zealand, and Save to Win in Michigan, it wasn't hard to get them on board.

Plus, there's a ton of data around how prize-linked savings programs are beneficial for society as a whole. That helps too.

Bonus bonds has been shut down in NZ, can you start Yotta up over here please? 😁

I saw that recently!

We would love to be in NZ. One day

Seconded, I loved my bonus bonds as a way to save.

One day we will be there!

Convince a bank to hold cash in an account?

What's to convince? This is the business model of banks that use that cash to float investments and other activity

It's more around them being comfortable with the prize mechanic on top of the account, since it's brand new in the US.

You'd be surprised. Banks currently are more than flush with deposits thanks to the ultra expansionary monetary policy run by the Fed. In fact, they are so plentiful as to be outright uneconomic to hold for a growing number of banks.

This is true

Are you a young guy running this out of your bedroom?

I'm getting old unfortunately. Almost 30. (edit: read this with sarcasm in your voice) Not as quick as I used to be on the basketball court, but my jump shot is still fierce.

It started out of my bedroom in the very very early days, but we are in an office and growing very quickly.

getting old unfortunately. Almost 30

ಠ_ಠ

Sarcasm!

I'm getting old unfortunately. Almost 30.

lol, made me spit out my coffee.

Damn sarcasm doesn't come across via text very well eh?

welcome to the world of text, where people take your sincerity for sarcasm and your sarcasm for sincerity.

Next AMA will need to be audio based

I think it’s amazing how much of a look behind the scenes we are getting No other app I’ve downloaded does this!!

Feel free to ask us anything!

Did you use the simpsons episode when Homer buys 50 lottery tickets as research?

"If you were 17 we'd be rich, but nooooooo, you had to be 10..."

I will have to check this one out!

Have you heard of the lottery for all store receipts in Taiwan? It's another policy you might like to promote.

No but I am checking this out thanks for sharing!

The website states "recurring tickets" so if you deposit $100 netting you 4 tickets. Keeping that balance as is, you would get 4 new tickets every week?

Yep, exactly!

Does this mean people with much more money are much more likely to win?

Yes that is right

Wow that’s fucking sick.

Yes it is

i’ve heard of people trying an incentive system for saving like this in the past and getting hammered by state regulations. i think I remember a freakonomics podcast (maybe?) about how lottery style incentives to save is legally impossible for anyone, but the state lottery. Can you talk about how you dealt with this?

edit: just found this article showing that the Freakonomics podcast led a listener to work for 7 years to get the law changed.) Looks like you should send that guy Michael Gaudini a Tesla. :-)

I actually connected with Gaudini very early on in my process! We operate as a sweepstakes though, which makes things easier

What's the difference (legally) between a sweepstakes and a lottery? The no purchase required?

Yes exactly. You have to have a free method of entry, which includes mail in entries

Why do you keep changing up the ticket ratios and how often will this happen, there’s been 2 this year.

The 10k max for 25 to 1 forced me to pull out a lot of my savings, did you notice this across the user base and how does it effect your plans going forward?

Interest rates have continued to remain at record lows. We are impacted by this, just like all banks fundamentally are.

In order to maintain the size of the prizes and not disadvantage people with smaller balances, we decided to go with this approach. It wouldn't have been sustainable to continue to offer the prizes we are offering while maintaining the ticket ratio for balances above $10k at the same rate.

We have done everything we can to make as few changes as possible. We don't expect to make any more changes here. If interest rates in the economy improve, we would do the opposite and improve ticket ratios and/or prizes.

Would you consider altering the 0.2% savings bonus instead of ticket limitations to avoid users having to move so much money around?

Yeah possibly, but again we don't foresee any changes here any time soon. Rates hopefully will pick back up soon enough too.

The OP has already given a response, but to play a more general devil's advocate: whenever you launch a product or service that's relatively novel in the market, you absolutely have to make post-launch iterations. Pre-GA, even with a strong alpha/beta phase, you're just guessing at what will work when the product/service hits scale and users start to expose edge cases that you hadn't considered or couldn't solve for without real data.

Very very true

It's worth saying that exactly the same thing has with National Prize Bonds in UK and Ireland. Interest rates more or less determine the prize pool, so they have to constantly tweak the pay out structure to keep it both equitable and interesting. That said (picture me squinting suspiciously at you OP) if you significantly changed the margin you are hanging on to as well as the prize pool amount, then people have a right to fisticuffs at dawn.

I agree!

saw you guys have a debit card where you have a chance at getting whatever you just purchased for free. How does this work? Is it instant? Is there any limit to the amount I can charge on it? Can I verify these odds?

For every debit swipe, you get at least a 1 in 500 chance to win that item for free and you find out instantly on purchase. So it is instant.

The odds are better if you have direct deposit setup and for certain purchases like in person at restaurants is 1 in 100.

Limit is $5k in prizes. So if you win something that you bought for $7k it's still eligible but you would win $5k as the max. No real way to verify the odds other than to monitor the leaderboards we will have in the app to see real people winning.

This sounds like it's encouraging people to spend, not save?

Giving people a way to spend and giving them cash back for it. Our users have asked for us to give them a way to spend from their account

That’s genius, for your company. I get 1% cash back on my card which is exceedingly boring but exceedingly better than getting one out of 500 transactions free. People love to see free and winning and all that.

Do you get 1% back on a debit card?

Neat idea Adam! How do my odds of winning a prize in the app compare to a scratch ticket or to powerball? I know I have zero risk of losing money in your savings account but if the chances are really really terrible I’m not sure if it scratches the same itch I get from buying a lottery ticket? If there’s a decent chance at even winning like a dollar or something I'm all here for it.

The odds of winning something on a PowerBall ticket is around 4%. With us it's around 2.2%, per ticket.

So the odds of winning something on a given week is slightly worse with us on a per ticket basis, but the key point is that you can never lose anything.

With PowerBall the odds of losing that $2 is 96%. With us, the odds of losing $2 is 0%.

Plus, the more tickets you have, the more likely you are to win something in a given week. So if you save $1,000 and get 40 tickets. Each ticket has a 2.2% chance to win, so your odds of winning something are pretty good every week.

Doesnt this mean that the bigger it grows, eventually the people with the highest savings will be the only people winning the prizes and draining the pool?

No, most prizes are not shared prizes. Plus the very biggest prizes are not usually split as is anyway.

Of course you're losing something. You lose money due to inflation and/or interest rate risk. I'll ignore the opportunity cost risk for the sake of argument but encouraging people to keep savings in an account with a low interest rate for the sake of the POTENTIAL of winning a prize does cause people to incur a loss since other banks and firms offer better interest rates. I think your idea is decent but your messaging in saying "you don't lose anything" is wholly incorrect.

There's opportunity cost, but everyone still needs cash in FDIC insured accounts. Yes they should also be investing in other assets if they can. But what is the alternative to having money in an FDIC insured account? Everyone still needs this. Plus getting 0.00% in Wells or BoA is a bigger opportunity cost.

It's all relative

Habits created when young drives habits in adulthood. A habit of savings seems good, a gambling habit not so much. What should parents consider before opening an account for their children?

I think kids need to be better educated more generally in personal finance. People graduate from high school and college and know about Shakespeare, crazy math they'll never use again, etc but they don't know what a credit card is or how it functions or how to manage their money. It's crazy.

So with Yotta, education on why this is different from gambling. How savings accounts work. What FDIC insurance is. All that sort of stuff. Making it clear why this is different from gambling and why gambling is harmful if done in excess.

Why did you go to such a length to get people to save money?

Many people have heard the stat that 40% of Americans can't come up with $400 in an emergency, which puts so many people in a financially vulnerable position should an unexpected emergency arise.

What many people don't know is that Americans spend over $80 BILLION dollar a year on lottery tickets. Lotteries are pretty much the worst gamble you can make - you lose over 50% of your cash on a probabilistic basis. Gambling at a casino is a much better investment than lottery tickets.

So almost half of America doesn't have emergency savings yet the avg household spends over $640 per year on lotteries. This is a huge problem, and this dichotomy and my passion for behavioral psychology got me incredibly excited at making saving instantly gratifying to help drive the long term benefit. Saving has always been boring. It only pays off in the long run or you only know you need to save when it's too late.

We want to make saving exciting in the short run so people get the long run benefit.

[removed]

Thank you u/superfuels!

I would just like to point out that the FTC has statistics that gambling has a better success rate than making money from an MLM. When you achieve world dominance please make this your next project. Thanks.

Noted. I put it on my calendar for my expected world dominance date in July of 2041.

Hey when you start your anti-mlm movement can I get in early? The earlier I get in the more I'll make, right? I could even recruit more anti-mlm followers. My high school friends would love it.

I dunno. You didn't use any emojis so you may not be cut out for it 😕

What they said

the avg household spends over $640 per year on lotteries

Do you have these stats available? Is it like mobile gaming, where the relatively few "whales" make up the majority of the spend, but the majority of households only spend a few dollars a year, if any?

$640 seems like a LOT for an average household. If you bought ONE ticket for both PowerBall and MegaMillions for every drawing in a year, it still wouldn't be $640 (it would be $416). Given, it's anecdotal, but I have never met anyone that buys a ticket for every drawing.

edit: Do these stats include demographics, which make marketing easier, as it's easier to identify and target the people who are most as risk of being lottery "whales?"

Pretty sure it’s just 80 billion (the amount he quoted as being spent on lottery yearly) divided by 125 million households.

Yes exactly that was the rough math. Simple average

Unfortunately since a lot of spend is cash based, there's not great data on breakouts of the spend. There is survey data out there though which is the best we have ton who is spending, how much, etc.

And surprisingly (or maybe not surprisingly?), the absolute dollar spend is similar across income demographics, meaning lower income folks spend a much higher % of their earnings on tickets than do upper income folks.

Where are you getting the data that the average family spends 640 annually on lotto tickets...that reeks of bullshit.

https://www.cnbc.com/2019/12/12/americans-spend-over-1000-dollars-a-year-on-lotto-tickets.html

Total lottery spend in a year divided by total households. Two separate data points I combined

Can a user have multiple savings accounts for multiple purposes (like one for each kid, one for a vacation fund, one for emergencies, etc.) without being subject to meeting minimum balance requirements for each? We’ve had an infuriating time with getting our preschooler set up with his own account - we want to start teaching him the value of saving up for things early, but a daily $500 minimum balance required to avoid monthly fees is beyond absurd for a kid his age, and our bank makes it so complicated for us to set up multiple accounts for different purposes.

Yes we have a Buckets feature that does this for you. We are also working on supporting kids over 13 to open accounts with a parental guardian on the account in the next few weeks.

https://www.withyotta.com/buckets

I use your product and wanted to share that I absolutely adore it. I have a deep appreciation for the fact that you created a product that encourages saving through a system that is usually used to do the opposite.

Right now, I use it to store a small portion of my emergency fund. I would like to use it to hold more, but the deposit/withdrawal limits are a barrier to that for me. Are there any plans to increase these limits and allow people to access more funds if they are needed?

Yes with a debit card the settlement times will be faster. As far as limits, I would love to learn more about your issues here. We will DM you to learn more!

Something I’ve always wondered, on an absolute basis what has better dollar-weighted odds buying scratch tickets or buying a powerball ticket? I know the powerball jackpot is bigger than most scratchers but also feel like I win with scratchers more.

On average, scratch off games pay out about 70%, so you lose 30% on average. PowerBall pays out much less than that - they take advantage of that chance to win tens or hundreds of millions of dollars psychology so can get away with worse payouts.

For context, casinos are much much better than both of these financially speaking, since you lose 1-10% of your money depending on the type of game.

They are both horrible.

I ran numbers a while ago using Mega Millions as an example. There are 302,575,350 combinations of numbers. Ignoring the variable jackpot, and ignoring the 'megaplier' option, the fixed prizes have an expected value of just under 25 cents on a $2 ticket.

The grand prize can raise this around 3 cents per 10 million in cash value. That means that a $300 million cash option has a total expected value of around $1.24. That's better than a scratch off, which is an expected value of around $1 on a $2 ticket. However, and here's the big however, the odds of winning that jackpot are incredibly miniscule. If you play Mega Millions twice a week, every week, you will have about a 50/50 chance of hitting the jackpot after about 2 million years.

Want to see how bad Mega Millions is? Try running this simulation for a few thousand years: https://www.cuandomevaatocar.com/en/megamillions/simulator/

EDIT: OP says that scratch offs have an expected value of 70 cents per dollar. I would assume that is correct. The reason scratch offs seem more 'lucky' is that most games have a 1 in 4 to 1 in 5 chance of winning, usually pretty small prizes. Overall odds of winning any prize in Mega Millions are 1 in 24. You're going to win more, smaller prizes with scratch offs.

Does this even include the taxes you would pay on any big prize winnings?

I'm not a scratch-off player, but if the claimed prizes are publicly listed, as they are in some (all?) jurisdictions, you can focus your buying on the games that haven't been won already to increase your chances.

Still can't get your odds above the huge expected loss percentage

You mentioned other countries that have similar programs to Yotta, so I'm wondering if Yotta is available in Canada? If not, do you plan to expand to Canada in the foreseeable future?

EDIT: Whoops, just browsed the FAQ on your website and that answered my question. Currently no and no, but I have found articles saying it's possible if you have a US bank account.

There are some legal hurdles right now to expand beyond the US, so it's on the roadmap but won't be coming this year unfortunately.

I've researched this financial strategy pretty thoroughly a few years ago after hearing it mentioned on Freakonomics, tried to partner with someone who thought they could do this but clearly hesitant as I knew how much work would be involved. Now to see this as the full fledged app that was envisioned, this needs to be made available to every one.

Are there still individual state restrictions on PLS accounts? Would a national federal credit union take this on as a means to replace boring savings accounts?

Awesome to hear you looked into it so deeply.

There are still state-by-state laws for prize-linked savings accounts. More states are legalizing them every year. Eventually I imagine we will see them in every state because they should be.

We structure our program as a sweepstakes, which allows us to operate and be available for use in all 50 states.

Do you have any job offerings? I'm seriously interested in this concept and have preached about PLS but have not seen a functional app till now.

I'm an Army veteran, worked in IT and infosec for a decade, fiddled with this concept as a business model with other veterans over couple years pre-covid but could not find app developers or a bank to even listen to the proposal.

What were the biggest hurdles in your process to creating the app? How do you convince banks to back this? And what are the biggest barriers to nationalizing/globalizing this? Are there laws or lawmakers prohibiting this?

Check out https://www.notion.so/yottasavings/Yotta-Careers-e6163a00dee94fd99dc63beea498587a for currently open roles!

On the international side, yes there are legal hurdles. These are solvable but require some real investment.

In terms of creating the product, the regulatory and legal frameworks and structures were the most painful aside from all the obvious challenges that traditionally come with building an app or a business.

How do you make the economics work for your company? Is the interest paid to customers slightly lower than it otherwise would be to fund the sweepstakes awards?

Without getting into too much detail here for competitive reasons, the business model is similar to any other bank. We also have the added benefit of having very strong user engagement. Most banks do not have this engagement. This enables us to do a lot of things like sponsored prizes and cross sell other products and services that we have planned for the future.

Since your program is structured as a sweepstakes, and US law requires "no purchase necessary to enter or win", do you get many hand-written entry forms?

Not too many. It turns out the cost of postage is higher than the probabilistic value of a single ticket.

Do you use some type of insurance service for the large prizes? Or is there some sort of risk-sharing with your partner bank?

Yeah for the jackpot we partner with an insurance company to offer that prize. Which actually means we want someone to win it and ensures that the sweepstakes is totally fair!

I think you would be very interested in the model of the 'Dutch Postcode Loterij' (translates as: Dutch zipcode lottery).

People can subscribe to it (can't buy single tickets, its always a subscription), and the main monthly prize of xx million falls on a certain zipcode. And then everyone on that zipcode with a subscription gets a part of that prize (total prize divided by number of winning tickets).

Wanna see your neighbours win bigtime while you get nothing? The FOMO is really big in that one.

AMA.

That is cool - how did you hear about this?

Hi! I am a gambling addict (Bipolar II) and I think this is so great. Me and my wife paid off all our debt (which I never even considered a possibility) and now we are looking into savings and travel cards, so this look perfect for me!

How will you ensure this stays a positive disruptor? Time and time again we see things like AirBNB or Lyft come in and change things up for the worse. How do we as a consumer know that your vision stays as the central vision of your business?

I know it's tough to trust promises, but I can tell you we do not plan to do anything that we believe isn't in the best interest of our customers/users. We want to use behavioral psych to help people.

That being said, if we ever strayed from that, I would expect you to take your business elsewhere and we would suffer as a result. We are incentivized to make sure you are happy! And that is our goal.

Why is it such a long wait for a debit card? I'd keep my emergency fund in Yotta if I could access it immediately, in a true emergency. With no debit card, Yotta can only act as savings.

We have been slowly rolling it out to make sure we have all of our fraud prevention and systems and processes scaled up and ready for a full rollout to support a very large base of users.

We have been rolling people off the waitlist on a daily basis now, so you should be off soon don't worry. We started this roll-out over the last couple weeks. Sorry for the delay and the wait here!

Really cool concept! Where does your revenue come from?

We earn interest on our deposits from our partner bank and interchange revenue on debit card spend. Without giving too much away from a competitive perspective, we are working on launching a secured credit card, credit building tools, and other features that will be revenue generative as well. Stay tuned for a lot of new features and products coming soon!

What's the thing behind the name Yotta?
just out of curiosity - there is a famous (at least in german speaking countries) and very scandalous scam artist from germany, living in the US going by that name

Yotta is the highest metric prefix - 10^24. Big number = big prizes. We wanted a word we could own and wasn't very competitive on Google, App Stores, etc. It's been a good name. The only issue is it's tough to spell and people mis-pronounce it often!

How is it correctly pronounced?

"Oughta" with a y in front it is pronounced. "Yoda" it is not pronounced

I am reading it as Yoda and there is not a thing you can do about it!

Pronounce it as Yoda you will

I think it’s a great thing you all are doing. How do you prevent people from just pulling their money out of their savings account soon after deposit?

Typically people enjoy Yotta so much that they don't want to pull their money. That being said, we have ways to prevent people from "gaming the system" by immediately depositing and withdrawing funds rapidly by removing tickets on a withdrawal. The only way to prevent gaming the system is to have the tickets removed be the best performing tickets that week at that point in time, which we have seen users frustrated with, but it is the only way to prevent gaming the system.

So would the best time to withdraw funds be Sunday after the draw or Monday

Yes exactly. That is the best time

What were some of the difficulties you faced starting Yotta?

Tough starting a company in a highly regulated industry. A lot of legal and structural things to deal with. That is probably the most unique aspect to starting Yotta versus some other type of software company.

Then of course there's the proving to investors you are working on something worth investing in, finding an awesome team to join you, and the rest that is typical of starting any company.

How much do you think you spent before seeing any profit?

What's your story going from "this would be a good idea" to "hello seed investors, this is what I have"?

Without getting into anything competitively sensitive, from initially working on the project (i.e well before launch) we went a year without revenue.

We got seed investors pre-revenue but we had a strong proof of concept and adoption with a beta of the app.

Yeah I'm from the UK and using Premium Bonds as an example must have gone a long way in proving that you're on to something

Yes for sure that helped a ton

Without getting into anything competitively sensitive, from initially working on the project (i.e well before launch) we went a year without revenue.

We got seed investors pre-revenue but we had a strong proof of concept and adoption with a beta of the app.

My wife and buy scratch tickets for fun whenever we have leftover cash (~$15-20) and always put the winnings towards buying more. What our odds of winning a big payout? Is it even possible?

Depends how you define big but in Powerball the jackpot odds are in 1 in 292 million.

Now $15-$20 sounds small, but if done on a weekly basis, over 30 years that is $23.4k spent in total. You'll win some of that back, but call it maybe $11.5k down the drain on average. Plus you could be investing that cash in etf and so that $23.4k could have been something much bigger.

That's not to say playing the lottery isn't worth it. It can be. It's fun it's exciting etc. But just make sure you're aware of what it is - paying for entertainment just like going to a sporting event or a movie.

Is there any way to combat wealth inequality with your game? For instance, someone with a lot of money (eg $1m) would have a significantly higher chance at winning than someone with just $1,000, and since it's a zero risk entry it's not like someone with a lot of wealth doing this would be losing their money like they would in a real gamble.

I couldn't find anywhere on the site that suggested a scale or max tickets.

Marginal balances above $10k earn a worse ticket ratio, so the game actually benefits lower balances more than bigger balances on a marginal basis. That being said, yes if you have more money your expected winnings are more, but not on a % basis and the percentage basis is what matters.

Most of the prize value on expectation is embedded in smaller, non-split prizes too, so other people having big balances don't hurt people with smaller balances.

Obviously, this is more of a long term thing, but would you ever consider taking the business to international markets? In particular the UK.

There are some legal hurdles right now to expand beyond the US, so it's on the roadmap but won't be coming this year unfortunately.

How did you get Graham Stephan as an investor in your bank? Did he approach you about it, or was it the other way around?

Edit: sorry if this double-posted, Reddit is being very glitchy right now

We got connected to Graham through some other YouTubers we knew who told us Graham was already using our app and really loved it. Then we chatted with Graham and he was excited to invest and we are excited to have him on board!

Have you received any threats (legal or otherwise) or pushback from any state lottery commissions?

No we have not yet. I think they would look pretty morally awful if they did this.

Have you guys figured out how to let someone schedule the withdrawal from their accounts on a specific day as to avoid overdrafts using the two week schedule?

Or have you guys reworked the system. So that if I need to take $50 out it charges the fee to the remaining balance and not to the money I'm requesting? If I need $50 but the fee is $1.50, why take it from the money that I'm requesting and not the remainder?

We don't charge overdraft fees on our end. Am I understanding your question right?

Thank you for replying. The overdraft fee will come from the users bank.

Say for instance I'm paid twice a month, on the 15th and the last day of the month (whichever date). I would like yotta to buy tickets on the 15th and the last day of the month.

If they are taking fund every two weeks. There will be a day that money is taken out nowhere near the payday and possibly when the account doesn't have money in it. At least if I can pick my own dates when I want the account to be charged. I can set it to only take money out on paydays by setting it to the 15th and the 31st. If there aren't 31 days, the money comes out on 30th, or 28th if it's February or the 29th if it's a leap year.

I see! I would recommend setting up direct deposit directly into Yotta. We have an easy way to do this in our settings. You can choose a portion of your paycheck to allocate. Then it will go in directly.

So when you look at Yotta I'm already reminded of SoFi. In the beginning SoFi was awesome but then you realize it was all to bolster its accounts on hand so they could go IPO and sell off. How is Yotta going to not be SoFi? Because this is great but I would hate to see it sell out and gut all this awesomness.

Behavioral Economist fan here and econ grad. I'm all in on Yotta. Big time believer in this strategy for savings, but also like that what Yotta already offer as incentive is strongly competitive to the best social banks out there (Sofi/Ally).

Not sure what Sofi did here, but for us we have to keep our users happy to be successful. If not, we will lose accounts. Impossible to prove this in advance, but we will stay aligned to our mission of helping people become financially robust using behavioral psychology.

So sofi was offering tons of % back on things like streaming subscriptions. Shopping at certain places etc. and then in a period of 6 months gutted all that for their “point” system. Then they tied all these other services together like a credit card and loans etc to give points instead of cash back.

And of course you can use the points to pay off your credit balance. But if you redeem the points for cash directly it’s half that worth rate.

Their entire thing is sleezeball central now.

Also in terms of behavioral economics, have you considered restructuring Yotta in a way similar to Lemonade, where it’s filed as a B-Corp? The idea revolves around while it’s important to make a buck, acting as a pure capitalist your company will at some point look like sofi citi BoA etc. B Corp structure could attract more people because it’s fiduciary responsibility shifts from making a buck for main shareholders to whatever you declare as the B-Corp. so maybe it’s financial services for low income earners/homeless or something. Maybe like how redlining and racism in banking has caused generational harm to POC, have as small business support goal.

I just saw an article on the SF Chronicle stating that the PPE loans in the Bay Area largely benefited wealthy white areas again, with avg income earners around 150k.

As a former b-Corp founder, I’m just passionate about creating great products that can also serve others through innovating in spaces that have typically marginalized people.

Good to know about the SoFi case study. We don't expect to do anything like this.

As for the B Corp, we haven't thought too much about it, but we will think more on it with the points you raise.

As an account holder in Yotta, I am curious why you have the $10,000 limit and the ratio for lottery tickets drops significantly after 10k? I would have more in there if this drop off didn’t happen.

Interest rates have continued to remain at record lows. We are impacted by this, just like all banks fundamentally are.
In order to maintain the size of the prizes and not disadvantage people with smaller balances, we decided to go with this approach. It wouldn't have been sustainable to continue to offer the prizes we are offering while maintaining the ticket ratio for balances above $10k at the same rate.
We have done everything we can to make as few changes as possible. We don't expect to make any more changes here. If interest rates in the economy improve, we would do the opposite and improve ticket ratios and/or prizes.

How are you able to pay better interest than a bank would?

We partner with primarily online-focused banks that don't have huge physical footprints or huge marketing budgets. Oversimplified, these savings can be passed on to you.

Can a person win more than once? Say I get super lucky and win $0.10 one week. Can I ever win anything again, or am I out, either permanently or for a period of time?

Yes winning once has no correlation with future wins. It's totally independent

How did this all start ? When I say that I don’t mean the idea you came up with or the research that was done but what was the very first step you took to get this business up and running physically.

Was it creating a website ? Was it getting a loan from a bank ?

I am interested in knowing the step by step process to go from an idea in your head to where you are today .

First step was a lot of research and becoming an expert in the space. Why now? Why doesn't this exist? What do people want? How can this work mechanically? What are the legal issues? Regulatory issues?

Then after that all checked out, I tested demand. Landing page + waitlist, talked to people who signed up, learned more about their wants and needs. Then working with banks to support the program and working on the dev and design details of an initial launch. Happy to go further here if you have more Qs!

Any plans to incorporate different investment vehicles? I have always tried to push a similar message to friends and family about saving but unfortunately economic circumstances make saving cash a net negative over only a short amount of time. To get people into the habit of saving I have them dollar cost average into Bitcoin x amount of dollars every x often.

Yeah down the road we can see ourselves getting into ETFs and safe investment vehicles. We are working on launching a more risk-seeking savings vehicle for folks via our Crypto buckets https://www.withyotta.com/crypto-buckets as well.

Are you concerned that Wells Fargo or Bank of America will just create a copycat savings account?

Not really. They are pretty slow moving and not tech forward. That being said, we are seeing copy cats emerge so we need to keep innovating rapidly and making the product awesome.

When you say that you have 0% chance of losing, do you mean that you will win a prize on every ticket? if so whats the lowest level of prize someone can win?

if not, do you mean that you won't lose any money if you participated?

Ah no I mean that you can't lose money as it's FDIC insured. But you can "not win" something in a given week.

Each ticket has roughly a 2.2% to win something in a given week. So if you have more than 40-50 tickets, odds are very very likely you will win something.

When do you expect crypto buckets to be available?

We are in beta right now with a group of test users. Full launch will likely come in the fall.

How do we sign up for the beta?

https://www.withyotta.com/crypto-buckets

Do you ever feel like you're going insane having to explain to adults why the lottery is a net negative on society?

Eh not really. I think it can be a bit confusing unless you've really thought about it or dug into it before.

how long til we see a yotta credit card? and can you tell us any confirmed features of it?

We are actively working on it. The first iteration will be a secured credit card, so no one will get into debt. The idea is it will help you build your credit with every payment, since we will report to all three credit bureaus.

Sometime in the fall we should have it out. It will be similar to our debit card - tickets back as rewards, the chance to win items for free every time you use it. Only better tickets back and better odds to win an item for free. Plus it will help you build your credit.

Are there any organizations, political parties, or non-profits actively advocating for the elimination of the lottery? I absolutely despise the idea of government-sponsored lotteries and would like to support candidates or orgs that pledge to eliminate them but it never seems to come up.

I've just seen internet blog posts and the like but nothing super official or formal. They make so much money so the government is not incentivized to get rid of them.

My thinking is that if anything, lotteries should be competitive. They should not be monopolized by the government. The only reason the odds are so so awful is because it's a monopoly. In no competitive market could you offer a lottery with 50+% margins. That's why casinos have 1% - 7% margins typically on their games

My sister works in marketing for the Delaware State Lottery, I ask her how she sleeps at night knowing she's promoting a tax on the poor and keeping poor people poor, her comeback is always that the money goes to Delaware's General Fund and helps education, welfare, etc. what do you say to skeptics who would say state lotteries help people?

I would argue that your taxing a lot of the people you are later on helping. So in some ways it's just circular. But there's all these admin costs to running a lottery (paying vendors, paying convenience stores etc) so there is loss in value there.

Also the lottery is only destructive when people play it with a $ amount with which they can't afford to lose. It's fine as an entertainment mechanic and yes some of those dollars do help people in need and come from people who have excess income to spend on entertainment. That part is good.

But we can all agree that the avg household spending $640/yr is not healthy

Do you actually get a heightened chance of winning something if you join a pool? Or if not, what are the mechanics of them? Or the purpose? Genuinely curious.

Any pool strategy ideas? I.e. best return—high tickets amounts and small # of people/large # of ppl OR low ticket amounts and small # of ppl/large pool?

Thanks!

You have a better chance to win something but that something would be lower on average since you split it more.

It's a different type of winning distribution for you basically if you want more frequent wins. Plus people have fun in friend groups together, similar to friends who pool lottery tickets, only this is far healthier.

No strategy can change the EV of the prizes to you, but they can change your variance. Join big pools for lower variance.

Who do you have making it to the NBA finals?

Hawks over the Suns in 6. You heard it here first.

If I put $1000 into an account with you and let it sit forever, do you have data on how much, on average, an account will gain per year from prizes and interest combined, ideally with a be curve or a spread? I love the idea of all of this, I just want to compare it to keeping it in my 3% high yield savings account with HMBradley, and you seem honest enough about the odds to share the data so people can make informed financial decisions.

It's around 1.7% on an expected value basis for a $1,000 balance. This is on average. You could make more, could make less. Plus no real hoops to jump through here and I believe there are hoops with them

Is this similar to Premium Bonds in the UK?

It's certainly similar in that Yotta and Premium Bonds are forms of prize-linked savings programs. We took a lot of inspiration from Premium Bonds but feel the game mechanic we have is much stronger with bigger payouts, more engaging weekly prize drawings, and more features like pools where you can combine your entries with friends to split prizes.

How does yotta make money?

We earn interest on our deposits from our partner bank and interchange revenue on debit card spend. Without giving too much away from a competitive perspective, we are working on launching a secured credit card, credit building tools, and other features that will be revenue generative as well. Stay tuned for a lot of new features and products coming soon!

Thank you for the response, I'm always excited for everything to do with this bank!!

Thank you! Appreciate the support and always let us know if you have any feedback.

Did Earnin rip you off, or vice versa?

They ripped us off. Carbon copied us. In a shameless way. Only we have continued to innovate and they haven't kept up or created as good of an experience.

Good afternoon Adam, I was under the impression that non state owned lotteries were illegal. How were you able to work around that? Is there something I’m missing?

We operate as a sweepstakes so have a free method of entry

I usually buy about 5 scratchers a week . I usually do pretty poorly on most but the Monopoly ones I always tend to come out ahead . Do some scratchers have better odds ?

I'm sure some have better odds than others, but trust me they all have awful odds. Way worse than any other form of gambling. You'll still lose over 30% of your cash put in on average over the long run. On average. Some people will win. But most will lose.

Since the numbers drawn are digital, how do users know the system isn't "rigged"? , i.e. Who's to say Yotta couldn't control the numbers to ensure no one ever gets a winning ticket?

You can compare winning numbers with your friends to see they are the same. You can also confirm your numbers don't change mid-week. As far as incentives, we don't payout the jackpot. An insurance company does that we pay no matter what. So we are actually incentivized for someone to win the jackpot in theory

Is this only available I'm the US?

There are some legal hurdles right now to expand beyond the US, so it's on the roadmap but won't be coming this year unfortunately.

What countries do you play on expanding into first?

Unclear right now to be honest. I imagine Canada is an obvious next one.

1. Aside from the lottery, is the Yotta team considering other forms of gambling games to gameify saving?
2. What do you think are some major hurdles that the company will likely face in the future and how is the team looking to overcome them?

PS: I am a Yotta user, love the interface and the current features! Keep up the good work and I look forward to the other features in the pipeline; i.e. credit card, crypto saving, and more!

1. Yes. We are considering some other gamification to help gamify saving and making better financial choices more broadly. However unfortunately I can't get into more detail here since the market is competitive. But stay tuned!
2. Continuing to build an excellent team of A+ talent, maintaining quality of customer support and satisfaction at scale, expanding into new demographics of customers/users and reaching millions of people!

I gather you worked at Goldman previously. How has that background helped in starting Yotta?

Did you have any prior experience or education in entrepreneurship? How have you learned to manage all the crazy aspects of this?

Yeah I would say it's helped though background in the tech world in conjunction with background in the finance world is really what helped.

No prior entrepreneurship experience. It's a lot of learning on the fly and talking to people who have done it before. It's definitely tough, but it's not brain surgery (I hate using "rocket science""

Does Yotta support joint accounts?

Yes!

hiring?

Check out https://www.notion.so/yottasavings/Yotta-Careers-e6163a00dee94fd99dc63beea498587a!

I am looking forward to using Yotta as my all-in-one full time bank in the future once paper checks, mobile deposits, and bill pay become available. My question is what would be the best way to deal with depositing cash if I were to need to deposit cash into my account?

We are working on adding a cash deposit method at convenience stores. So this is still a ways out (maybe next year). Right now, the best way would be to have a brick & mortar bank, deposit cash there and then transfer it via ACH or wire. I know that's annoying and we are working on accepting cash deposits, but this is the reality right now.

Are you aware of the net societal gains in social safety nets that the lottery provides?

And are you aware of the negative impacts that saving money has on an economy?

Yes, but I would argue the net social gain from the lottery is actually negative. The big winners are the 7/11s and stores that sell the tickets.

And yes if everyone hoarded cash, that is bad for the economy, but there is a balance that is optimal. I don't know what that optimal balance is exactly, but I do know that 40% of Americans not having $400 for an emergency is not optimal. And I know that the average household spend being $640 per year on lotteries is likely also not optimal given the % of income this is for some families.

Why a Tesla? They consistently rank as the brand with the most problems and issues?

That cant be possible. Fords exist.

Good point...

It's an exciting and fun prize a lot of people love. You can also take the cash value instead of the car if you want.

Boy, remember when "AMA" meant "Ask Me Anything", not "Ask Me Anything about [product/service] I'm promoting"?

Doesn't have to be about Yotta itself - feel free to ask anything financial/lottery/psychology related.