I wondered how the site makes money. I don’t have a clear answer, but do have some guesses, like: they don’t make money.
According to this 2016 article at TechCrunch, they raised 1.2 million dollars to start up.
That puts Simbi at a distinct advantage over the existing alternative currencies.
Existing Alternative Currencies?
Yes, for decades, there have been alternative currencies, or scrip, that operated in communities around the world.
In the past, it had a negative reputation, because scrip was often issued by employers, and the “funny money” could be spent at the company store, in a company town. When one party controlled the money, and bought labor with it, and set the prices on goods, they could basically “own” the people in the town.
So, company scrip is now outlawed, but community-based, voluntary scrip, also known as a local exchange trading system has been created. The best known are the time-based currencies: Time Dollar, TimeBank, Ithaca HOURS, and labor notes.
The stated goals of local currency are usually rooted in environmental and social justice. Ithaca Hours, for example,
They often form during recessions, because recessions are generally a slowdown in the flow of currency, sometimes due to a shrinkage in the money supply, and sometimes due to excessive money hoarding. Scrip was widespread during the Great Depression, to kickstart local economies.
TimeBanking or the Time Dollar system was created by Edgar Cahn during the Reagan era welfare cuts.
Despite these dual goals, alternative currencies have generally flourished in distressed middle class college towns, like Ithaca, NY, often attracting white people. That is something to ponder, because if there are any communities facing a currency shortage, and supportive of environmental and social justice, it’s oppressed communities of color.
(My suspicion is that aspects of a gift economy, and systems of charitable patronage, exists in oppressed communities. The necessity of paying rent, and buying food, require that people not spend any time working to acquire an alternative currency that cannot provide these two things. The charity systems focus on providing food, clothing, and shelter if they have the money to do that.)
Partly, one of the appeals of a time-dollar system is that it flattens the distribution of wages. By pricing services on time, rather than “market price”, people with skills not in demand by the market can trade skills that are in demand.
For example, someone can cook for an hour, and trade for an hour of plumbing. An hour of work is an hour of work.
It’s not only fair, but moral and ecological: presumably, nobody in the system is cooking methamphetamines, or installing piping for an oil refinery, so the plumber can trade an hour of laying pipe, for 50 grams of crystal for his crackpipe.
Part of the appeal of an ideological currency like HOURS rests in the consumer choices the community currency is forcing upon each other: ecology, social justice, and more equal wages.
Simbi Compared to Existing Alternative Currencies
Let’s compare these alteranative currencies to Simbi.
- Service oriented
- Community Controlled
- Environmental and Social Justice goals
- Usually funded by membership fees
- Operated by a community board
- National (It’s international, but postal rates make shipping expensive)
- Local service oriented
- Controlled by Simbi.com
- Amorphous goals, but similar goals are stated in their advertising
- Funded by a venture capital firm
- Operated by a board which includes the VC
So, how does Simbi make money?
You can only know by asking Simib.com, but I suspect they don’t make any money at all. The venture capitalists are funding them for now. They want their investment to pay off in the future.
How can Simbi make money in the future?
Perhaps by allowing people to trade simbi for dollars, and charging a transaction fee. This would turn Simbi into a large reputation system.
Perhaps by advertising – allowing advertisers to pay extra to be visible to the community.
Perhaps by selling user behavior data to data-mining companies. They can discover emergent products and markets that can be exploited in the regular, capitalist market.