Otto’s savings games combat NZ’s gambling losses to build financial habits

Otto is a rewards programme for money that uses simple fun games to help you build good financial habits.

Tomas van Ammers, co-founder of Otto, talks to Tom Raynel about the psychology behind building habits, and how his savings rewards programme has even got himself hooked.

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What is Otto?

Otto is a rewards programme for money that uses simple fun games to help you build good financial habits. It’s a way to incentivise good financial behaviour.

What inspired you to start the business?

I’ve worked in software for over a decade, including for gambling companies, so building up some of their software. What really stood out in New Zealand is that Kiwis gamble a lot. If you look at the data, there are more regular gamblers than there are investors.

New Zealand has one of the highest per capita losses to gambling in the world. Australia, a market we’re also really interested in, has the highest losses per capita out of any country. So we thought that’s something that we could try and combat a little bit with games that would help people to learn other more positive financial habits.

The other side of that is that we also have a bit of an issue with saving in New Zealand. About 40% of Kiwis don’t have enough saved for a rainy day. One of the most important things, at least for me personally but for people in general, for their financial lives is to have the option.

Optionality is if the bill comes in and you need a medical procedure or you have to take time off work because something changes, having something saved to help you out in that period can really reduce stress and it can make a huge difference. That’s why we targeted saving as the first area we wanted to go into.

Tomas van Ammers, co-founder of Otto, wants to help people to learn more positive financial habits by gamifying savings.

What games are part of the platform?

So Savings Quest was just the first game that we launched and that is based on Duolingo. You have checkpoints, you build streaks as you reach those checkpoints, and you earn Otto tokens that you can then use to play other games and enter draws for cash and other prizes.

We have Debt Reduction Quest, which involves building a rocket one level at a time, and that’s to help people pay off their debt. Because especially if there’s a high interest rate on someone’s debt account, it’s actually often better to pay off the debt before you start saving. So we wanted to build a game for that and there’s some social elements of that as well.

Then we’re adding KiwiSaver and Investment Quests, which are to encourage those who have already got KiwiSaver to contribute a little extra when they can, and for those who haven’t opted into KiwiSaver to consider it because that’s one of the great schemes in New Zealand, having that employer-included investment scheme.

What is the psychology behind building habits?

There’s a lot of research into this, but I guess I can give one example. There’s a researcher called BJ Fogg. He’s a guy out of the United States and he’s got a book called Tiny Habits. He talks about how we need small nudges that help us build up to larger habits.

Nowadays, it’s quite difficult to get someone’s attention. If you tell someone that to get on top of their finances, they should download this spreadsheet and spend the next six hours learning how it works, the chance of them actually doing that is extremely low.

But you start with a really small habit first, so in our case, it’s save $1 between now and the next two weeks, something really small. It doesn’t matter about the money, it’s just about the fact that you took action, that can snowball into a much bigger habit over time.

Otto's first game is called Savings Quest and it's based on Duolingo. There are checkpoints, you build streaks as you reach those checkpoints, and you earn Otto tokens that you can then use to play other games and enter draws for cash and other prizes.

Do you plan on turning the service into an app, and how did you fund it?

We went with the web app as it’s much easier to iterate quickly like this, but we have Android and iOS on the cards. Realistically I’d say early next year, but it’s not the first thing we want to launch. We’ve got quite a few other things that we’re excited about before we do the app side of things.

We were self-funded initially, and we got some help from Callaghan through the Ārohia Seed Grant. That was a huge help. Then we got accepted into the Creative HQ Fintech lab this year, and that team, and the people they built into the community, have been really helpful.

What would be your advice to other budding entrepreneurs wanting to start a business?

First, find out if there’s actually a problem that you’re trying to solve. Talk to people before you build anything and really listen to your potential customers. They know what they want, and you should build something that they actually want.

The second thing is that you’re going to have to persevere probably a lot more than you imagine. Most entrepreneurs are almost stubborn to a problematic level. Doing that with other people, whether it’s a co-founder or people in your community, will definitely help because there will be hard times and it’s nice to have a counterbalance.

The third thing is just go and do it.

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.