Piggme's social commerce model lines users' pockets with its digital currency, warms their hearts
Yesterday afternoon I paid for a cup of coffee using a digital currency. It wasn’t Bitcoin, Litecoin or Dogecoin. No, my Starbucks was purchased on a Visa card loaded with Piggmes.
Afterwards, I had a chat in the shade of Twitter headquarters with Jimmy Peixoto, the founder and CEO of Piggme, a Brazilian social commerce site that launched in January. Peixoto is in town pitching Piggme to investors and exploring opening a Silicon Valley operation, though that second piece seems to be in the early stages.
“What I don’t get is, where is Silicon Valley?” he asked.
It’s a question that has gotten more interesting in the past couple of years, though I dutifully sketched out the commonly accepted geography for him. It’s been a while since I took a literature class, so forgive me if I’m wrong it saying that ‘Silicon Valley’ is a synecdoche, whereby the whole of something is referred to by one of its parts. It’s like referring to the U.S. Government as ‘Washington’ or calling credit cards ‘plastic.’ I was tempted to tell Peixoto that he’d been in Silicon Valley since the moment he dreamed up Piggme.
It was a process that took some time, beginning when Peixoto was studying at Bringham Young University, and continuing through his subsequent missionary deployment. The problem that led him to create Piggme is a common one these days – how to harness the power of the social Web in a way that generates real social good.
There are many attempts at cracking this nut, from curated charitable giving subscription services like Omakase to the mobile, fitness-based giving model of companies like Charity Mile. But Piggme’s solution is an unforeseen departure that seems to be catching on, if only in Brazil (so far).
So what is it? To begin with, it’s not the emerging-world Amazon of charitable giving. While Piggme is an ecommerce company of sorts, that description would be too simple. Besides, Brazil still has the world’s largest Amazon for the public good.
Piggme is not the Groupon of social change in the developing world, either. But it does have daily $1 deals on stuff like movie tickets, tablet computers, smartphones, webcams, and soon, Peixoto hopes, a car. All proceeds from these deals go to charities that users can select from a list vetted by the company, targeting the United Nation’s eight Millennium Development Goals.
The basic idea borrows from many business models. It’s a private club-style social shopping site. A rewards point system. A daily deals site. A social network. A Facebook-integrated app. And a digital currency.
“I can assure that we will always have the lowest price, no matter how big another company might be,” Peixoto says.
That’s because he offers the companies who supply the goods an opportunity to gain exposure directly in the news feeds of users, offsetting price discounts with precious visibility. When a user buys something on Piggme, the purchase is broadcast in their feed automatically, though there is always the option to opt-out. This also goes for the daily deals, and Piggme activity earns users 1 percent to 50 percent cash back in the form of Piggmes, a reward coin pegged to the dollar, that can be spent in store or loaded on a Piggme Visa card. Users can also earn Piggmes by getting friends to sign up, one Piggme per new friend. Piggme income is capped at the equivalent of $1,000 per month.
Piggme has 260,000 total users and averages 10,000 daily active users, but is yet to have a mobile app. Peixoto says he plans to rollout on mobile later this year, but the realities of the Brazilian market have kept him from doing so thus far.
A study released in February by market research company eMarketer found that only 23 percent of Brazilians have smartphones, ranking in second to Mexico for Latin American smartphone penetration. Another study, by Experian Marketing Services, found that 78.5 percent of Brazil’s roughly 100 million internet users were on social networks, with Facebook the predominant choice.
While Facebook was rolling out new advertising offerings during its developer conference just a few clicks away, Peixoto assured me that he’d been in contact with that company about his model of integration, and that he considers Piggme a Facebook ally.
Peixoto says that the demands of the Latin American business world caused him to ensure that, from the word go, he had a provable revenue stream. Piggme has three – monthly subscription fees of $5/user, hosted ads, and the revenue from purchases made through the Piggme site.
Piggme raised an initial $450,000 investment from Peixoto and co-founder Andre Leal, and recently closed a second round of $1.4 from a Brazilian venture capital firm. Peixoto says he is exploring opportunities to expand into other markets, including China and Europe.
It’s still early in the life of Piggme, but Peixoto has big ambitions. If it continues its rate of growth, the company could direct millions of dollars a year to charities, bridging the gap between capitalism and social work, along with the gap between the geographical Silicon Valley and the entrepreneurial ideal it represents.
[Image via Rickz, Flickr]