How Tsu Risks Demotivating Its Own Users

Published on Author Eli Fennell


Update 08/16/2016

Tsu has officially announced they will be shutting down, after failing to secure their latest round of funding. While there were probably numerous reasons why it failed to catch on, I do believe that part of its failure was due to the issue I raised in the following article.

Tsu, the new social network that promises to share ad revenue with its users (unlike other social networks), has been trending on social media sites these past few days as users sign up and beg others to join them.  Those who join because of you also pass some of their revenue from downstream, in a pyramid-like structure.

Some have focused on this pyramid-like structure or the inscrutable, invisible algorithms that determine who gets paid out, focusing on the wisdom (or legality) of these as business decisions.

However, something else about their business model has been bugging me, an echo of something I could almost recall from my days as an Experimental Psych Major.  Finally, this morning, I figured out what it was, a principle I learned regarding motivation and reward and how reward can negatively impact motivation:

The Overjustification Effect

From Wikipedia:

The overjustification effect occurs when an expected external incentive such as money or prizes decreases a person’s intrinsic motivation to perform a task. According to self-perception theory, people pay more attention to the external reward for an activity than to the inherent enjoyment and satisfaction received from the activity itself. The overall effect of offering a reward for a previously unrewarded activity is a shift to extrinsic motivation and the undermining of pre-existing intrinsic motivation.

Businesses are especially interested, or should be, in understanding this principle because, very often, attempting to incentivize your workers to work harder can actually demotivate them.  Speaking from personal experience, I worked many years ago for Whole Foods, and I busted my hump to work hard at my job.  Unfortunately, once a month on a Saturday early in the morning, all employees were required to attend a team meeting at which, based on voting by employees within each division, bonuses would be distributed to the ‘hardest workers’.

Many months of watching a clique within my own department of close friends all vote repeatedly for each other, until it became obvious they would never vote for anyone outside their group, left me increasing demotivated, and I confess I started working less hard.  Had these bonuses simply not existed, I believe that would not have happened.

This is Exactly What Tsu is Doing

With their monetization model, Tsu is tangibly rewarding a previously unrewarded activity, i.e. using a social network.  This is, for some, a dream come true to those people who feel themselves to be “content creators”, “marketers”, etc… and who WANT to be rewarded for everything they do online.

For the average person, however, a social network is about BEING SOCIAL (which should, admittedly, be a truism).  They don’t care that the network itself makes money from their using it, though they may be concerned by exactly HOW it makes its money (violating privacy, targeting ads, etc…; this is where Ello is enjoying some recent success).

The worst part of the overjustification effect is that, by shifting the motivations for the task from intrinsic to extrinsic, not only does it alter the behavior of users from a genuine desire to be social to a desire to make money from being social, but at the same time any reduction or removal of the reward causes immediate demotivation. If, for example, Tsu users don’t make enough money to be satisfied (or don’t make any), or their revenue share goes down over time, or Tsu makes changes that make earning revenue harder, this will have an immediate demotivating effect.

Even in the absence of this, their behaviors will be less genuinely social and more driven by naked profit motive, which for a social network is analogically equivalent to someone only hanging out with their friends because they’re paid to.  Would you hang out with someone knowing they would only hang out with you, or even would just spend less time with you, if someone wasn’t paying them to do it?

This doesn’t just affect Tsu, and may perhaps be the death knell of any social network trying to incentivize users with monetary rewards for use and/or recruitment.  At the very least, such a monetization model should almost certainly not be a made a central part of the proclaimed appeal of the network.  It will not only attract the shadiest of characters and most narcissistic self-promoters, but will even alter the behaviors of and ultimately demotivate even those users who will gladly return to Facebook or Twitter or wherever they’re just enjoying themselves being social.

However noble the intention to “share the wealth” might be, monetizing social media in almost any imaginable way runs afoul of human nature, and seems nearly certain to destroy any network before it can ever become loved.