The Mary Kay lady of the digital age may be a Wi-Fi hotspot. Just as the cosmetics company hawks eyeliner and lipgloss by incentivizing women to recruit their friends, so too a startup called Karma leverages its users as marketers for its Wi-Fi hub.
The Wi-Fi device itself does the selling. When hotspot owners are out and about, anyone nearby can connect to their devices to use 100 megabytes of free data. In return for sharing their device, owners also receive 100 megabytes of free Wi-Fi (thus the name "Karma"). When moochers run out of free bytes, they can buy more Wi-Fi at the same flat rate the device owner pays and use it on any Karma Wi-Fi hotspot. If the moochers convert to device owners, they'll start earning rewards for introducing others to the service.
"Nobody is looking at the design of the product and technology as we have been doing," Karma CEO Robert Gaal tells Fast Company. "Look what Box has done with storage and Gmail has done with email. That’s something we want to do with Broadband." It’s not unusual for a bold coffee shop patron to ask his partner for a MiFi password. Karma just makes it a palatable process for the less bold and a profitable one for the carrier.
Karma doesn’t provide the Wi-Fi connection. That comes from its partner carrier Clearwire. Nor does it make the hardware. The MiFi Karma sells for $80 is made by a partner manufacturer in Korea and sold at cost.
Not only does Karma's software flip industry standards by selling mobile Internet before a MiFi device, it adds a social aspect to the process by allowing Karma users to send Facebook friend requests and thank you notes to those with whom they share Internet access. The flat fee structure of $14 per gigabyte of Internet use—no monthly rates, fees or subscriptions included—completes Karma's service as an anomaly in the industry.
Eventually, Gaal says Karma could do the same for stationary Wi-Fi, starting with spaces such as food trucks and stores. That means one day, when your neighbor logs into your Wi-Fi, you may thank him rather than calling him a leech. And so will your broadband provider.