Simultaneously, alongside his friends, the Almatinian is developing his own startup, AlgaApp – an application that rewards people for the steps they take. During an interview for the collaborative initiative of Digital Business and Astana Hub, «100 Startup Stories of Kazakhstan», Alim discussed the rewards offered for walking, the user requirements, the current popularity of this format in Kazakhstan, and the potential for earning through it.

«Thousands of goods and promo codes have already been distributed by us»

– Alim, what was the driving force behind your decision to initiate a startup?

– One day, my friend Anton came up with the concept of building a «Tinder for HR», where users could browse through potential job applicants and swipe right on those they found appealing. Nonetheless, bringing this product to life necessitated significant initial investments, leading us to abandon the idea.

But we couldn’t shake off the idea within the IT realm. Every time we met, our discussions increasingly revolved around news from the startup world. Our conversations began to incorporate terms like STEPN, Sweatcoin, and Walken, all of which enabled users to earn through walking. I came up with the name AlgaApp, we formulated a business plan, and gradually commenced its implementation. And that’s how it all began.

– What distinguishes you from applications like STEPN, Sweatcoin, and Walken, considering that the concept of rewarding steps is not a novel idea?

– To begin with, we differ in that we are not confined to cryptocurrencies. We’ve devised our own currency, which we’ve named the TER-token. In Kazakh, «TER»  translates to sweat, signifying that users earn with their effort and physical activity.

Moreover, we maintain a low entry threshold. Users simply download the application, register, input their name, last name, and phone number, and then begin walking and earning, all completely free of charge. There’s no need to purchase anything, unlike with STEPN, where one must first spend several hundred or even thousands of dollars on NFT sneakers.

Lastly, we serve a crucial social function. Presently, 16% of global deaths stem from cardiovascular diseases, and Kazakhstan is no exception, with 40 thousand individuals experiencing strokes annually. Walking is the most effective way to prevent such ailments, with WHO experts advocating a minimum of 5,000 steps daily. To encourage this behavior, we offer 1 TER for every 1,000 steps taken.

– Do you distribute tokens solely for walking, or do you reward other activities too?

–Currently, we only reward steps. Additionally, this is subject to limitations; even if you surpass 5,000 steps in a day, the maximum you can earn is 5 TER.

Nonetheless, our application offers two additional avenues to earn extra tokens. The first option involves watching advertisements, for which we provide 5 TER for three ads. Importantly, you have full control over when and whether to watch these advertisements.

The second opportunity involves inviting friends, for which we award 5 TER per person, without any limitations. However, it’s important to note that the tokens are only awarded after your friends have walked at least 1,000 steps.

– How can you utilize the accumulated TER tokens?

– You can redeem them in our internal store, where we provide a variety of items including PlayStation consoles, Yandex stations, wireless headphones, phone stands, electric brushes, and other merchandise. Recently, we’ve also introduced coupons, promotional codes for various services, and cinema tickets. We anticipate expanding our offerings soon to include more substantial rewards, such as trips to European shows or tours to Egypt.

It’s important to note that you cannot convert TER tokens into conventional currency or cryptocurrency, nor can you use them elsewhere.

– What is the pricing model in your store?

– We operate with an internal exchange rate: 1 TER is equivalent to 50 tenge. When establishing this rate, our aim was to ensure that users do not need to walk extensively or for several days to amass enough tokens for purchasing goods.

In the case of expensive items, we implement special coefficients to create a more adaptable exchange rate. For instance, if the price exceeds 100,000 tenge, 1 TER is adjusted to 60-70 tenge, facilitating the user’s ability to accumulate more rapidly.

However, there are also contrasting scenarios. We encountered a situation where a girl managed to swiftly acquire a Yandex station, priced at 650 TER, by inviting 99 friends. We verified that all her friends were indeed active participants.

– Are there any restrictions for users when it comes to receiving goods?

– Initially, there were no limitations. However, an interesting scenario arose at one point. Following a drop, a user aimed to collect four items simultaneously through genuine efforts, and we readily facilitated this request.

Nevertheless, we recognized that if many users followed a similar approach, it might lead to a shortage of goods for others. Therefore, we implemented a restriction: one item per user per month. It’s worth noting that this limitation does not apply to the abundance of promo codes we offer.

Overall, we have disseminated more than a thousand goods and promo codes.

«Roughly half of our user base consists of individuals from various regions»

– How do you monitor the steps taken by users?

– When it comes to iOS, we integrate with the pre-installed Health application on iPhones to retrieve data on the steps taken. We do not request access to other data, such as heart rate or geolocation, as it is unnecessary for our purposes.

The process is more intricate for Android devices. Simultaneous to the iOS version, we developed a version for the Android system. We successfully uploaded the application to Google Play and received prompt approval. However, we encountered challenges with step counting due to variations in the built-in applications on different smartphones. Consequently, we had to establish a unified framework.

We opted to integrate with Google Fit, a universal tracker for all platforms. However, this decision came with certain requirements, including undergoing multiple verifications, incorporating Google authentication, and more. While we have initiated this process, the response time from Google can sometimes span weeks. Once we secure the approval, we plan to roll out the Android application in the near future.

– What is the current user count for AlgaApp?

– We have over 160 thousand users, and it’s worth noting that we haven’t released the Android version yet, nor have we invested in marketing. Our sole advertisements were QR codes featuring our application on power banks placed in various locations. Recently, we initiated a trial digital billboard campaign in Almaty, which has already attracted new users.

I am particularly delighted by the fact that nearly half of our user base consists of individuals from various regions. Notably, the first official purchase was made by a resident from an aul in the Mangystau region.

However, our greatest source of pride lies in our 95 thousand MAU (monthly active users) and 42 thousand DAU (daily active users). On average, users spend around 30 minutes within our application.

– What is the retention rate?

– On the first day, the retention rate stands at 60%, while on the 28th day, it is at 35%. In comparison, the industry benchmark in the health tech category is less than 2%.

We employed a small strategy. Users must log into the AlgaApp the following day to claim their step rewards. Unlike other services, we do not necessitate the application to run in the background while walking. Simply checking in is sufficient to initiate step counting.

– It is relatively simple to artificially inflate step counts. Does AlgaApp have mechanisms in place to detect and prevent cheating?

– Currently, we do not have such mechanisms in place. However, in practice, there are few instances of users attempting to cheat. Furthermore, with a 5 TER limit, the risk of fraudulent activity is minimal. Even if a user artificially inflates their step count by 500,000 steps, it would yield no substantial benefit.

However, the upcoming version of the application, which we are currently actively developing, will feature an internal step counter. This counter will compare the duration of the walking period and flag any suspicious activity. For instance, if the user typically walks no more than 100-200 steps per hour, and suddenly there’s a spike of 10,000 steps in 30 minutes, the system will promptly detect such anomalies and only count the steps that were genuinely taken.

«We have already recovered all the investments made in the project»

– What is the total investment made in AlgaApp thus far?

– Presently, we have invested 15 million tenge. A significant portion of our expenditure is allocated to the team. Alongside contributions from crowdfunders, our team comprises eight members, including developers, support staff, and SMM specialists. Additionally, we utilized personal funds to procure goods for the shop. Approximately a month into our operations, we were approached by an official representative of a medical equipment brand, who proposed a barter agreement involving the exchange of tonometers.

– Is there a monetization strategy in place?

– Yes, we monetize through advertising. Our primary revenue stream comes from our connection to the Google system, which provides us with the requisite resources, mainly in the form of Rewarded Video format. Users voluntarily choose to view these ads for 30 seconds without the option to skip. Upon completion, they receive a reward. Our responsibility lies in ensuring that no prohibited content is displayed.

Consequently, we have not only recouped all initial investments in the project but can also manage operational expenses. Frankly, we were pleasantly surprised by the remarkable effectiveness of this approach.

Another avenue for monetization is through our partners. At present, we’ve been more successful in cultivating barter arrangements with them. We’ve had a notable case with Wolt, where they furnished us with 500 exclusive promo codes valued at 3,000 tenge. Currently, we are in discussions to outline the terms for future collaboration.

At present, we boast 6 partners, of which 2 contribute through banner payments. I believe that as our user base expands, more companies will show keen interest in advertising or showcasing their products on our platform.

– Are you planning to expand the subscription base solely within Kazakhstan, or are you contemplating entry into other markets?

– We do not intend to confine our operations to Kazakhstan alone. We recognize significant potential in Uzbekistan, where the population is twice as large and the issue of cardiovascular diseases is equally prevalent. Initially, we aim to test AlgaApp in Tashkent. If successful, we can then expand to other cities.

Following that, our strategy involves branching into other Central Asian and Caucasus countries. The launch in these regions shouldn’t pose significant challenges – primarily, translating the application interface and investing in marketing. The primary challenge lies in securing partners who can provide the necessary goods, but we believe this hurdle can be overcome.

Certainly, our long-term plan includes expansion into the MENA region. It is crucial to establish a presence in this area to gain access to significant venture capital. Notably, in the UAE and Saudi Arabia, investments are particularly attracted to companies registered within these countries.

Our plans for the USA are currently in the early stages and remain long-term objectives. Initially, our focus is on acquiring experience in established markets, showcasing traction, and subsequently expanding globally.

– Are you considering seeking investments?

– While we have such plans, we are in no rush to pursue them. Initially, we contemplated developing an MVP and approaching investors. However, as we started generating revenue, we decided to put this idea on hold. Our immediate goal is to attain 500,000 users. I believe that with the launch of the Android version, we will easily achieve this milestone.

Consequently, to expedite our growth, we anticipate the necessity for funding. Scaling our team and initiating robust marketing campaigns will demand substantial resources. We have already commenced negotiations with potential investors, including discussions with the teams at MOST Ventures and MyVentures. Notably, during our conversation with MyVentures, we discovered that their CEO has been an active user of our application for two months.

The ideal scenario would be securing a USD 500,000 investment at a valuation of USD 5 million. I believe this is an attainable goal. Our user base is consistently expanding, and with the impending release of the Android version, our growth is expected to accelerate. With a proven business model in place, we are already generating revenue.

– What are your immediate plans moving forward?

– Our immediate plans entail the launch of AlgaApp 2.0. We aim to incorporate walking routes for users, enabling them to enjoy 5,000-step walks in scenic locations. Additionally, we plan to introduce challenges with substantial rewards for winners and guaranteed gifts for all participants, fostering a sense of community. Furthermore, we intend to expand the product range in our store.

Furthermore, we are seeking to establish a collaboration with the Ministry of Health of the Republic of Kazakhstan. Their potential provision of informational support for our project could serve as a significant motivation for individuals to engage in walking, thereby enhancing the prevention of cardiovascular diseases. Undoubtedly, this partnership should pique the Ministry’s interest.

https://digitalbusiness.kz/en/2023-10-25/over-160-000-users-join-within-the-first-months-almatinians-launch-an-app-enabling-earnings-through-walking/