Last October I had the “a-ha!” moment that many entrepreneurs get when they hit the idea of a lifetime. The revenue model, business plan, and even wireframes were done within weeks, but to this day it remains my white whale. The problem was not money, time or lack of vision; it was an issue that plagues many social startups- the value proposition.

Driving traffic to your application is a big part in the success of your startup but getting users to a) participate and b) keep coming back are even more important. Applications like Digg and Foursquare do a great job of both offering great services and keeping their users coming back. Each offer “leader boards” for their users to show off their use of the program and Foursquare even began rolling out rewards for check ins. I see this as a great opportunity for businesses to increase their exposure and bring in new customers by utilizing features of new web technology.

On the topic of rewards, renowned venture capitalist Fred Wilson wrote last week about how one of his portfolio companies, GetGlue.com, just began offering rewards to users for participating in their rating program. In exchange for “liking” movies or TV shows, you could be selected to win a free movie pass to your local movie theater. After asking Fred if this method works, given the fact that rewards may sway opinion, he noted that “adding money to any social system is always a risk”. He suggested I take a look at a 2006 article by Yochai Benkler titled “The Wealth of Networks”. Even though I take anything written on tech prior to 2009 with a grain of salt I decided to give it a read. In it, Benkler goes into great detail on how how promote participation by offering users what they want: money. I learned a great deal on the psyche of my target audience, but still can’t get past the “poisoning the well” theory. The model I had in mind weighed heavily on users to rank an item and give text based feedback on their opinion. If I were to offer a reward for their feedback, what would stop them from giving me an answer I want to hear in hopes of getting a reward? To Benkler’s defense, there weren’t (to my knowledge) many social startups in the mix offering rewards for opinion.

So here I am, stuck with the same problem as I did in October. I have since put this project on ice while I think of an ethical way to reward users. For now, I’m still not convinced that rewarding opinion will work.