Meet Piggme, a social network built on "Crowdgiving"

The Brazilian Piggme gives its users discounts and benefits for donating to charity

Entrepreneur interview by Steven Loeb
September 27, 2014
Short URL: http://vator.tv/n/395a

Like so many others, I have had numerous members of my family become stricken with cancer. One of them, my mother's cousin, used to organize big group for the Susan G Komen Race for the Cure in Central Park. Now, I'm not sure if you've ever been to one of those events, but they are HUGE. And they are filled with celebrities. I ever got to walk past none other than Judge Judy herself! 

At some point, I have to admit, I began to wonder just how much money was being spent (or, in my mind, "wasted") on organizing these events. Couldn't people just donate? Why did it require something like on such a grand to get people to care?

Well, the truth is that people need an incentive to give. That is just the way it is, and there's no getting around it. So why not embrace it, the way Piggme has? 

Piggme is a social network, located in Brazil, that is built on the concept of what it calls "Crowdgiving." Essentially what that means is that the company partners with brands to give users the chance to win prizes for giving to charity.

The company has only been around for eight months, and already more than 290,000 people in Brazil have joined on Facebook. It already has thousands of paying customers and relationships with global brands and big retailers in South America, including Swarovski, Visa, Cinemark, PayPal, Claro, Oi, Multilaser, Playland, Braspag, Nicephotos.com.br, Engage Eventos and ABC da Saude.

Piggme has also raised $2 million in funding from Francisco Valim and Haya Investments.

I saw down with Jimmy Peixoto, the founder and CEO of Piggme, to discuss the origins of the idea, how it works and where he wants to eventually take it.

VatorNews: Tell me about the origins of Piggme and where the idea came from.

Jimmy Peixoto: I was a Mormon missionary for two years. I came from Brazil to serve in Flordia and, you know, people usually think that missionaries from the Mormon church knock on doors and try to convert people to baptize, and so forth. That is part of it, because we do believe we have a good message, but the other part of it we do a lot of social work. We help charities, we help orphans, we help people paint their house, we help public services, we do all kinds of good stuff. You know, I took two years of my life to do it and they were the best two years I've ever had. And what I decided I wanted to do was, on a daily basis, give people and opportunity to help. 

Not everyone can actually, you know, take off two years of their life, regardless of why, and religion, and so forth, to actually do some good full time and I thought if I gave people at least a little bit of what I felt, they would buy into the mission, and spread it around by helping everybody else. So, I wanted to add value to people by giving them the opportunity to help.

Now, as a visionary, I felt that I wanted to change the world, but if I wanted to do that and make a tool that could actually help around the world, we couldn't be a non-profit organization. We had to start a new category in business. We had to go into social entrepreneurship, where we have a profitable company, that I don't need to be asking for money, you know, like passing the hat, to do good. I felt like if we added value enough for people, people will do it. People would actually go and pay a recurring fee and they would make it profitable enough for us to do good. 

That's where Piggme came about, by wanting to add value and help people out.

VN: Can you expand on why you didn't want to be a non-profit and what you felt it would be like if you had taken that route? 

JP: Because I don't think we could make it big enough. We couldn't go out and actually change, on a massive scale, people's lives. And you say, 'Well, by doing little offers here and there can you actually change people's lives?' Well, we'd like to see, you know, and we're focusing on a new market where people can start doing it, we're going to inspire other companies, and inspire new ideas, to do it as well. And that's the best thing  that you can do, you know? Maybe this will grow so insanely big that we will actually change people's lives or maybe we will inspire people to do the same. 

I was at Disrupt and there was an underlying message across all the speakers, talking about how the companies from here on have to be socially responsible but profitable to make things actually work. And we wanted to take on philanthropy and help in a way that you'll, for example, never see a picture of a hungry child from Africa on our site. That's not the point. I want to take you on another trip. I want to say, 'Hey, it's very cool to help. Are you there with us?' It's like take that weird aspect of helping, of begging, and saying, 'That's not it.'

VN: It's almost as if you're trying not to guilt people into giving money, but you're trying to give them another reason to give.

JP: Yes, exactly. It's a new reason, it's a new market. That's what we've created. You know, the term 'crowdgiving' had never been used before. And so we kind of took possession of that term and created a new business category called crowdgiving commerce. And nobody's ever done that before. So we felt that it could be a good way for us to start something new and see where it goes. 

I feel that people don't buy what you sell, but why you sell. So if people understand who I am, and why Piggme was created, we believe that we will do some good. That's we're not just in for the heck of it. We're into it to change the world.

Just last week we impacted over 1,000 people doing social good with Piggme in a fun way. McDonalds partnered with us in Brazil and for the first time over 250 kids had a McDonald's sandwich. So it's like, well, some people might say, 'McDonalds?" But, in Brazil, and for these kids, that's a novelty. They're like, 'Wow, McDonalds! That's pretty cool!' So we're bringing philanthropy to capitalism in such a good way that they love it, you know, and we're helping kids, we're helping brands and we're helping users. It's a win-win.

VN: Give me a little bit of a walkthrough on how this works on both sides of the equation, from the perspective of the user and of the brand.

JP: We created a platform where we challenge our users to donate in exchange for prizes, for deep discounts and for benefits. How we do it is we have a social deal every day. For example, if you donate 99 cents, more or less because it’s in reals, then you get free movie tickets from Cinemark. And you're like, '99 cents is not very much.' So we give the opportunity to give more. 

VN: If you give two donations of 99 cents, do you get more tickets?

JP: No, its like 'How big is your heart?' I'm already giving you tickets for 99 cents, man, you want more? Come on! (laughs) 

So, what we found out is that people end up, sometimes, donating more than what it's worth. That's beautiful. That's awesome. And, for the company, it's like Cinemark tickets actually going for more than what they're worth? I'm not diminishing their value, I'm actually increasing their value in a way they've never done before. And you can't buy that.

We are built around a social network platform but we are not a standalone, per se, social network trying to take over being the new Facebook but we're trying to work with all the social networks so we can spread the word faster.

VN: So you give and then post it to Facebook or Twitter and then you also say, 'Here, you can also give and get this deal.'

JP: 90% of the people who login go through Facebook Connect and they allow us to post. We don't interact with your feed, we don't do anything, we're not invasive, we just say, 'Hey, can we just post that you've helped an organization so that we can spread the word?' And they're like, 'Sure man, I'll do it for you!' 

And the cool thing is, lets look at Cinemark on the marketing side. When you are doing an online campaign, as the company gets more popular on Facebook, you have to spend more money to show to your own people that liked your page that you exist. It's never ending. So you always have to spend more money, and what you get is a sponsored post that everyone hates. I mean, the CTR might be high but people are like, 'I don't want to see this.' And it's expensive. What we're doing is we're providing a space where pure peer-to-peer interaction happens. Where someone is telling a friend, for real because they are the one posting it, on prime rel estate, saying, 'I just helped with 99 cents for organization such and such and just got some free movie tickets from Cinemark. 

VN: It's almost like free advertising for them.

JP: It is. It is free good advertising. That's what I want to make sure that people understand. They are getting advertising but the advertising of saying, 'Cinemark is helping a cause.' You cannot buy that. You cannot create a campaign like that because it wouldn't be good anyway. I'm just saying, 'Cinemark is cool.' And they are helping out.

And so what else do they get? The opportunity costs off an unsold seat at a Cinemark in Brazil is about $6. What they do is they give you that unsold seat. They say, "Hey, do you want to put that as a social deal? I'll sell that social deal at 99 cents. You don't go alone to the movies, well I do sometimes, but most people don't. And you aren't going to go dry during the movies, so you need a Coke. You need some popcorn. And what happens is, you take somebody, and you go to the concession stand, and instead of losing $6 they make $59. 

So, it's the cheapest marketing campaign you've ever done in your life, and it has the best return that they've ever had, in such a way that nobody's ever done before. 

VN: How does it break down, exactly? What percentage do you take?

JP: 100% goes to the charity. I don't make a dime off of social offers.

VN: And Cinemark?

JP: Just the return off peer-to-peer interactions and marketing. Plus the aggregate value of taking someone else to the movie.

VN: What is the return exactly? Have you been able to calculate that?

JP: Its hard to say, in general, as every partner has a different story. But for Cinemark, an unsold seat brings in $59.

We give less meaning to selfies and more to community, as we're getting together to help. We're a community, that's what we want to do. That's why we have this social network, for people that have the same type of personality that want to help, they can get together and feel the same together and do good. 

We what we do is give users a profile. They have their friends, their posts, their photos, how much you've saved already and you're always going to see that what you've given is always much smaller than what you have received. So, you're giving to help out, but you're getting so much in return that you want to help even more.

We have over 35 charities working with us in Brazil so far. We've been open for 8 months so we're still working on getting more charities and so forth. All of them go through a severe auditing process with Pricewaterhouse in Brazil. We've received over 350 applications, and only 35 passed. We want to make sure it's that hard so that their business is legit. 

VN: Does the user get to choose which charity they are giving to, or does the brand choose?

JP: I'm a good hub, let's say. I have all the charities in there and however you feel, 'I feel like helping to eradicate cancer.' Fine, here's a charity for you. We've audited it, we know its correct, we know its legit, go ahead. 

As you interact with people online, and with the platform, you earn Piggmes, which is my online currency. And one Piggme is worth $1. And you can spend that within the website or we have a partnership with Visa and you can transfer your online points to your Piggme Visa card and use it anywhere you want. 

VN: How do you earn Piggmes?

JP: It depends on the marketing strategy from the company. For example, because the card allows me to take people from online to offline, so if Cinemark has a region where they are not selling so much, they can say, 'Hey, I'll let them have Piggmes if they go to the south region.' So I can literally take people from the online to the offline and turn that into hundreds of dollars for them. So they increase revenue by taking people online to offline.

Let me go deeper a little bit. Dominos Pizza. They told me, 'Hey, there's a south part San Paolo and some of my pizza places are not selling so much. So they did a marketing campaign with us where they would buy a coupon for a cheaper pizza and earn Piggmes at the same time. But they had to go use the Piggmes at a certain store that they want to try to help. So I'm actually taking more people into their store with power to buy. And I can help these big brands have more revenue wherever they want. 

VN: Who is your competition? I know you said that this is a new space, but have others popped up?

JP: We're pioneers. Nobody's ever done it before. We've researched it, we've looked at it, people have come to crowdfunding, crowdsourcing, they've had little bits here and there, but nobody's actually got it all together and put it as a business model and launched as a social entrepreneurship tool. We're the very first ones. And we wanted to do it in Brazil, first because I'm Brazilian, obviously. I went to school here, I lived in America for a long time, but I wanted to go down to South America where there was a bigger opportunity to start helping, and then expand it here. We've been approached by several funds here, wanting to bring it here, and also we had an offer to open in Europe and Asia as well. 

VN: Is American then the next step for Piggme? Or would it be Europe and Asia?

JP: It depends. Since I also have a close relationship to America, my kids are American, they were born here and I was here for 10 years, the market is more prime in terms of helping. I need to corner a few markets and I want to make sure that we handle Brazil well. We've been open for 8 months, we haven't done any marketing, we have over 100,000 active users and our partnerships in Brazil will probably take us to a million users by the end of the year in Brazil. And so, to take it up here, it's a matter of replicating the model and getting great partners around the world.

VN: Talk to me about where you eventually want to take the space. What's the philosophy behind the company and where do you see it going over the next five to ten years?

JP: We want to be a global company, one that can add value to people all over the world. Whether it is to users, to charities or to companies. We want to really be the pioneers of social entrepreneurship as a successful global company. That's what we're trying to do. 

You know, if we can have regular companies start doing good, I mean, this month Google announced a tool that will help users donate, Facebook has announced a donate button. I mean, if we can inspire more companies to do the same, I believe that the whole ecosystem of people will be better for everyone. So we'll elevate everybody into a better society and that means I'll have better customers. You'll have better readers. So by helping right from the bottom, and helping other companies be inspired to do so, we'll help everyone at the same time.

I know its the ultimate visionary goal but, hey, I am! Why not? Let's go change the world. Why not? You know, I have to think like that. Why not? 

VN: Given that the company doesn't make any money from the donations, how does it make money?

JP: We have four lines of revenue. We have a freemium membership, where you can go in and use it as a social network and donate and help for free. But if you want to get into the deeper discounts and advantages, you pay a monthly fee of $9.95 a month. We have thousands of people in Brazil paying to use the system. As soon as you join up, for example, you get a free movie ticket.  The point is, I always want to give you more than you are giving so all the benefits and stuff is worth more than $9.95. So that's one of the ways we make money. 

We also sell advertising on our website because people are hooked on it all day long. Depending on the products that are sold, on the e-commerce platform for example, we get a commission on the sale. Not the money that goes into the charity. This is a partnership I have with the companies. And we do have the partnership with our card. When people transact to use the card we do receive some cash-back from it.

VN: Would you ever consider allowing users to ask for individual donations for their own personal causes? Such as if they needed an operation or medical treatment.

JP: This is something that has come up before. I think that as we create a tool, and we create critical mass, there will be other opportunities for us to create new models of giving and helping. But, as of right now, I have to focus on making this work. It is working but, trust me, we're still a long way from being perfect. But I think that, as it goes, why not? The thing is, like, I want to make sure whatever causes come in, they're audited and they're in good standing. I want to make sure that you, as a donor, know where it goes to and exactly what's happening. So if someone just comes up with something and puts it there, it becomes crowdsourcing, or crowdfunding. That's not the point. We want to create a community that actually changes the world so you need to feel good about it. 

VN: How big is this space? How big can Piggme ultimately be? How many users do you think you can attract to the site?

JP: Wow! (laughs) Well, you know, again, we're into making a global company. So its hard to say because we are a social company in the sense of networking and in the sense of helping and so, as you look at different tools that have gathered people, they've grown so big that, really, what is the limit? It's too early for me to tell you but the adoption rate is so big and people are inviting friends and asking and kind of going for it in such a way that I have to believe that this can be very, very big.

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Description: Piggme is the first social network built on the concept of Crowdgiving. In it, we challenge our users to donate resources in exchange for...