Having a lot of friends can feel like a million bucks.
If those friends are on Instagram, it can at least be worth a slice of pie or some spinach fondue, thanks to Chicago startup Popular Pays, a free iPhone app that aims to turn your social clout into actual currency.
“You can open our app, you can go to Bang Bang Pie, Firecakes — all these local merchants that we signed up — and you can get something in exchange for taking a photo,” says Popular Pays co-founder Allan Holmes.
Here’s how its works: Merchants agree to trade goods to Instagram users who have at least 500 followers in exchange for their influence in the social space. A “swap” function in the app unlocks in the store using GPS and enables the merchant to swipe to account for the freebie. Users are expected — but not required — to post a picture of what they received, tagging the merchant and using the hashtag #poppays.
“You posting a photo is you paying for it because it’s your social currency,” Holmes says. “If you don’t actually post a photo, then it’s like you didn’t pay for it.”
The company, launched Aug. 1, boasts more than 1,500 users and says it hasn’t paid for any advertising.
“Every time someone posts, they talk about Popular Pays,” Holmes says. “There’s no need to spend money on advertising. If people don’t like it, they won’t talk about us. If people like it, they’ll use it.”
All merchants offering goods through the site do so free of charge, something the founders acknowledge is going to have to change to make money.
“In the beginning, we charged $25 per month, but we dropped that system to pursue a more value-based one where merchants would pay a small amount per photo that was posted,” says co-founder Corbett Drummey. “That amount would change according to the influence of the user who posted it. We’re developing that system now.”
The free marketing hooked Dimitri Syrkin-Nikolau, who owns a pair of Dimo’s Pizza locations.
“The social aspect of the Internet modifies word of mouth by greatly increasing the exposure that’s possible, and possible from an entirely organic source,” he says.
Syrkin-Nikolau, who offers Instagram users with at least 500 followers a free slice of pizza at his Wrigleyville or Wicker Park locations through the app, says he was willing to take a chance on the program not only because it required minimal investment but also because the app benefits merchants and consumers.
There are some technical kinks to be worked out, he says, but “when it’s offered as a paid service, when they prove the value, I would certainly recommend it.”
Holmes and Drummey won’t specify who has bought in or how much money they’ve raised, saying only that it’s in the “six-figure range.”
Enough for them to float for about 18 months, Drummey says.
Popular Pays isn’t the first business to attempt to monetize social influence, nor will it be the last.
San Francisco-based Klout is perhaps the most successful, having partnered with McDonald’s and American Airlines, among other major brands, in an attempt to win the sultans of social media.
Holmes says what separates Popular Pays from the rest of the pack is its hyperlocal focus.
“Klout is for big brands,” he says. “You’ll never find anything on our app that’s not worth sharing. I don’t know if they have the taste or the passion for local business that we do.”
TOP PHOTO: Popular Pays founders Allan Holmes (from left), Nathan Michael and Corbett Drummey. ABOVE:Merchants swipe the app and fork over free merchandise, which users are expected to Instagram.