Mystery Shopper Magazine

MSM talks with Erik Chelstad, CTO & Co-Founder of Observa

New shoppers may register with Observa by clicking here.

MSM: What is Observa? 

Erik Chelstad: Observa is designed to give brands and retailers the information they need to succeed in today’s highly competitive market. E-commerce, even though it is a small percentage of overall sales, is disrupting traditional brick and mortar retail. The top 3 points of disruption are price, selection, and convenience. When brands and retailers try to address the disruption points in stores (consistent pricing, items in stock, etc.), they fail 60-70% of the time. Observa gives brands and retailers the ability to fix their failures in a time and cost-effective way to increase the return on their spend immediately.

We aim to treat all of our observers fairly and pay them for their observations as quickly as possible. This isn’t just to keep people using our system, but it’s a core ethical behavior; treating others as you’d want to be treated.

MSM: Please tell us a little bit about yourself. What is your working and educational background?

Erik Chelstad: I’m a computer and electrical engineer from Purdue with experience managing engineering teams through the startup and IPO phases. I spent a portion of my career designing a system that keeps in-flight aircraft from colliding, even when in crowded airspaces. As the equipment is required for any planes with more than 12 seats, I’m happy each time I look into the sky and think that the code I created is running and has a small part in moving people around safely. I spend a lot of time in the mountains and on the water and enjoy bringing useful technology into the environment that adds to the quality and safety without detracting from the reason for adventuring in the first place. (Yes, technology comes in the forms of both a rain jacket and an emergency satellite rescue beacon!)

MSM: How did Observa come into existence?

Erik Chelstad: I started the company with my co-founder Hugh Holman back in 2016. We had an idea that we wanted to work together in 2015 after we connected in business school. Hugh has a background in retail and IT, so we started talking about the problems retail has with assuring compliance with their marketing and promotional efforts. I happened to be working with some avalanche centers at the time to collect data from backcountry ski and mountain guides to increase public safety for all travelers. The two ideas actually merged together pretty well, knowing that brands and retailers needed data as fast as possible, but the places they are trying to get the data from can actually be difficult. Sometimes it’s not easy to get there (islands, small towns, short time-frames, etc.), and often technology isn’t working quite well; yes, large stores often have about the same data connectivity as a remote mountain-top.

We started the company, as we thought that providing data could be useful for brands and retailers, but also we thought it would be a great way for normal people going about their daily lives to take part in the fun, excitement, and extra money opportunities from the gig economy.

MSM: Please explain how Observa works. What does the process look like from signing up to getting paid, and everything in between?

Erik Chelstad: From the observer’s perspective, Observa is an app where you can get paid for completing surveys in stores, or “opportunities.” These usually involve answering a few questions, taking some photos, and speaking with a store associate or manager. Our opportunities pay no less than $4, usually up to about $12, and we pay via PayPal or cryptocurrency same-day.

Step 1: download the Observa app onto your Android or iPhone

Step 2: create a login with the same email you use for PayPal (or Coinbase, if you prefer being paid in cryptocurrency) and that’s it!

Step 3: complete opportunities in your area and get paid!

In between, we are using both humans and AI to ensure the accuracy and validity of the data so that our customers get the real information they can act upon.

MSM: How does Observa differ from other mystery shopping companies?

Erik Chelstad: 

Quick payment

We pay as quickly as we validate an observation, usually within the same day. No point systems or delays; no thresholds to reach before payout (i.e. must earn $20 or do 5 opportunities before receiving payment)

Variety of opportunities

We have a wide spectrum of things to do, from visiting a Costco and testing a display, to going to a baseball game and looking at the price of beer and peanuts. Some of our opportunities require interaction, some are really simple pictures and questions.

Distribution

Although we don’t have an opportunity available everywhere, all the time, our customers are often using Observa to try and gather data in places they can’t easily get themselves. This usually means small towns, so we are happy that we get to spread the opportunities around.

Personalized notification

Our app is built with notifications based on your location and can be personalized (through the preferences screen) to also be filtered by payout and distance.

Fairness

When we first started Observa we read a lot of complaints from people about how the other companies would withhold payment or not pay them for their efforts. We designed our system right from the start to eliminate those problems and strive to ensure they don’t creep in.

Ease of use

You need a mobile device, we need your email. That’s it. We don’t need to know anything about your beliefs or personal life. You don’t have to pay us anything to get started. Install the app, sign up, and participate when it suits you.

MSM: Why should people sign up with Observa? What’s in it for them?

Erik Chelstad: Observa knows that observers are the backbone of our business. We go to great lengths to ensure they are treated fairly and know that they are valued. We are always looking for people in cities and way out in the country and rural areas – wherever there are gas stations, grocery stores, etc. – that want to earn extra cash, enjoy these types of tasks, and don’t mind being patient/waiting for more opportunities to become available in their area.

MSM: What is the range of income per observation? How long does the average observation take to complete?

Erik Chelstad: Opportunities pay no less than $4 for store checks, usually up to about $12. We have had opportunities to pay more than $12, sometimes up to $25 or more. The average observation takes 15-20 minutes to complete. The pay for an opportunity depends on a few factors including location, how long it is expected for the observer to complete it, and if there are any extra tasks in the observation (checking on a display to ensure it is present in the store and working, having a conversation with a store manager, returning products to customer service, hanging coupons, etc). The more tasks involved in an observation, the higher the pay would typically be. The majority of our opportunities are simple to store checks, going into a retail location and checking on products, making sure everything is priced correctly, in stock, etc.. Our goal is to pay $20 an hour for the effort that needs to be put in for an observation. We don’t include travel time, as our entire system is designed around having observers take observations when and where it’s convenient for them.

MSM: How many assignments can a typical observer expect to be offered per week or month?

Erik Chelstad: We do not ‘assign’ opportunities to any observer per se. Every single opportunity on the app is first-come, first served. The number of opportunities an observer can complete depends on where our customers need observations to be done. All of our locations and the frequency of opportunities are chosen by our customers. They provide us with a store list based on their retail needs, and we put those Observations on the map. The number of opportunities available to an observer will depend on how many there are in their area at any one time.

If there are no opportunities near an observer, there is something else fun they can do on the Observa app! We have “Photo Challenge” opportunities, which are basically photo contests that any observer can enter up to once per day. One observer’s entry will be chosen per day and they will win $5. Then, at the end of a two-week submission period, all the daily winners, as well as some wildcards chosen by Observa, go onto our Facebook page for voting by the public. The Observer that took the photo that gets the most votes will win $10, and second- and third-place win $5 each – even if they already won a $5 daily prize!

MSM: How much money would a top observer earn per week, month, or year?

Erik Chelstad: An observer can easily earn a few hundred a months if a concentrated grouping of opportunities is near them and they have the time to get to all of the locations. Honestly, however, we designed our system to be fair for everyone, so usually, a group of opportunities is going to be completed by a group of people, not just one individual. One of the biggest complaints we hear from observers and people that do mystery shopping types of activity is that they don’t get a chance to do anything. We wanted to give chances to as many people as possible. This is why we have a reservation timeout of 2 hours and a waitlist. The reservation allows an observer to go and take an observation, but the waitlist allows someone else to do it if the first person fails to in their timeframe.

 MSM: What kind of places of business do your observations take place in? Are they located within the United States, Canada, or globally?

Erik Chelstad: We have had opportunities in gas stations, convenience stores, supermarkets, big-box retail chains, and baseball and soccer stadiums! Currently, the Observa app can be downloaded anywhere in the world. We have had store-check opportunities in USA & Canada – and even have an opportunity currently available in Antarctica!

MSM: How can an observer have the most success with Observa?

Erik Chelstad: The best way to have success is to simply grab the opportunities near them as they come up and continually do quality observations. We created an instant notification system for the app that pops up an alert on your phone whenever you’re near an opportunity that is available. We made this configurable so you can set a minimum distance and payout that is of interest to you – meaning: if you don’t want to get notified about opportunities that pay less than $8 or are more than 5 miles from you, you can do that!. We validate all of the observations that come in, so observers that make bad or false observations will be removed from the system. Don’t be one of those!

MSM: What is an interesting or surprising fact about Observa that most people have no idea about?

Erik Chelstad: Observers can choose to be paid in a variety of cryptocurrencies. It’s something we offer, because, honestly, we think it’s fun and interesting.

MSM: Is there anything else that you would like to mention about Observa?

Erik Chelstad: We don’t have thresholds on our observations, but we are trying to offer more things for observers to do through our app. We recently started doing photo contests, and have been having a blast! Winners are chosen by the public and we pay out small cash rewards. We are also planning (by the end of 2018) on offering other ways to earn small amounts of money such as identifying products in a photo or on a shelf.