Reserve App : Adoption Update 15th March 2021
Issue #2 on Medium
So we arrive a day before the Reserve app is unrestricted to any Venezuelan who wants to use it — which is from 16th to 31st March. April will be referrals from existing users, the number of referrals being controlled by the team in order to maintain good customer service levels. Downloads of the app have been at 10k+ for a while now, so we should see the next level of 50k+ reported by the Play Store. All exciting stuff — so let’s drill into a couple of themes.
Adoption and Reviews
The Reserve app just popped in at #5 in the most popular Finance apps in Venezuela
HolaReserve twitter followers have been increasing at a greater rate than previously due to the waiting list being processed and new users tweeting about their experiences. I think it fair to say that peoples reactions are extremely positive — almost to the point of fanatic. It may be lost on those of us not used to inflation at all, let alone hyperinflation, but if someone offered you an easy way to save 60% of your money in a month, then you’d be pretty happy too. There are also some people with serious numbers of followers giving good reviews as well.
Also, we get feedback that Reserve app is better than the competition and that customer service is outstanding.
Reviews on the Play Store are very good — the 1 star reviews mostly from people with very old phones which can’t run the app.
Let’s see how that compares to PC Mags Editors choice for 2021 — Firefox — source : https://www.pcmag.com/picks/best-android-apps
Again — as well as having the best retention rate by far in its sector, metrics for reviews are level with industry leading apps — bullish behaviour.
The Network Effect
Before the early 2000s if you had a product which was an application, distribution was one of the biggest barriers to entry (apart from the obvious actually having a good product) — you would need to package and ship to — sharp intake of breath — an actual shop. Now we have app store and google play, that no longer matters, so in order to protect yourself from competition, it is important to generate a Network Effect — definition courtesy of nfx.com “Network effects are one of the four remaining defensibilities in the digital age, including brand, embedding, and scale. Of the four, network effects are by far the strongest.” They go on to define 13 types :
Since Reserve is actually a Protocol, not just an app, then it can be found as both a protocol and marketplace (2-sided) for the app part. Examples of protocol are Bitcoin and Ethereum, marketplace (2-sided) are Visa and AMEX. Thus it is quite well protected when it scales. So how many users are required for this to take place? Let’s look at another payments app — AirTM.
Reserve v AirTM
AirTM has been downloaded 100,000+ on Google Play and interestingly has been removed from the App Store. Reviews are mixed
As at 16th June they had 1M users and 172.8K Twitter followers. Now for some creative accounting as there are no published figures for revenue or transactions. On 25th March 2019 El Pais reported that AirTM was moving 150,000 transactions per day at an average of $40. Lets say that was with 750,000 users, so lets just say $6M per day, around $182.5M per month. So an average transaction of $243.33 per user per month.
If we project that Reserve might have 50,000 users by the end of April, then that would suggest $12.16M in transactions per month, or a run rate of $146M per year. It will be interesting to get the metrics Nevin alluded to at the last AMA, which should be released in July as he said a few months.
How fast can Reserve grow? Nevin alludes to incentivising app use to achieve something similar to PayPal : PayPal said in their SEC filings around the time of their IPO: “We began the year 2000 with 12,000 users and just six months later our account base had grown to 2.2 million. As of December 31, 2001, we had 12.8 million accounts.” Source : https://medium.com/reserve-currency/preparing-to-offer-rsv-incentives-in-order-to-accelerate-reserve-app-growth-d0941cdcaacf
The next few months will prove to be very interesting indeed.