Path 3 adds a major update--stickers.

They’re basically artist-made emoticons for purchase.

This is Fluffie, a character that’s been designed with couples in mind.

The philosophy behind these stickers is that characters can convey complex emotions that would be difficult to express in quick type.

Their reactions are intense, and often contextual, telling a whole story in an image.

The company toyed with stickers that weren’t character based--food, actually--and their beta testers never used them.

Notably, Path 3 charges for these stickers, and people are actually buying them. They sold more stickers in one day than they did photo filters over an entire year.

Co.Design

Path 3.0 Bets That Paying Customers Are Happier

Stickers for purchase? Paid subscriptions? Path 3 wants to add value by charging you for it.

While Instagram blossomed to 100 million users with a dead simple design, Silicon Valley wunderkind Path has had its nose to the grindstone, continually innovating to find the alchemy of experience that would make it just as irresistible. In a sense, Path’s loss has been our gain, as it’s led to an inventiveness that’s often lacking in social media’s me-too startups.

So you’ll imagine my surprise when co-founder/CEO Dave Morin told us about Path’s latest innovation: Virtual stickers. That he’d be charging for.

I was sure that Path had jumped the shark. And then I heard Morin out.

Stickers, An Efficient Way To Replace Words

It’s unfair to say that stickers are the only new feature. They’re actually an element of a major technical update: In version 3, Path is evolving to support a Snapchat-like ping it calls private messaging. Inside one-on-one or group chats, users can communicate with their purchased artist-series “stickers”--basically supersized emoji sprinkled with anime-inspired cuteness.

At first glance, they look busy, superfluous and overwrought. But believe it or not, these colorful stickers are here in the name of communicative efficiency.

“Each sticker takes an immense amount of utility that would normally require 20 text messages and boils it down to a single click,” Morin says.

There’s a method behind the madness. Each sticker saw “hundreds” of iterations, I’m told, to convey just the right message. In friend-and-family beta testing, Path learned some interesting things: What Morin had thought would be a surefire hit--stickers of food, such as sushi--were a total flop. But stickers driven by characters were used again and again. It’s a lesson that actually led to Nom Nom Parade, a sticker set of food mascots.

But why did the anthropomorphic element work? It comes back to that grounding philosophy of utility. A picture of sushi conveys “I’m eating sushi.” A picture of a ravenous California roll conveys “I’M GOING TO DIE IF I DON’T GET SOME SUSHI UP IN MY GRILL, STAT!”

“We found that the stickers that worked the best are the ones that really truly communicate pure intense emotion,” Morin says. “We have a character named Hugh who’s really focused on the best and the worst emotions. I love the juxtaposition.”

See Hugh on the bottom row, left. On the right, Fluffie, a character designed especially for couples.

OK…But Why Charge?

I didn’t know a nice way to ask about it, but Path’s problem doesn’t seem to be a lack of cash--they’re funded, and they could probably be even more funded--it’s a lack of active users. If stickers are such a unique and valuable means of communication, why not use that distinction as a free reason to get more people using the service? For Morin, it’s an issue of transparency. While Facebook is a free service that makes money from you behind the curtain of the social graph, Path wants to be an earnest transaction between the user, the service, “and no one else.”

“If 10 years from now we want to end up as one of the most trusted brands in the world, we really want users to understand how we make money,” Morin says. “We want all of our users to be customers. We don’t even like the idea of users. It’s an interesting word if you think about it, this word ‘user.’ It implies there’s a relationship that’s very one-sided. We like to find a way to make all of our users customers and provide value worth paying for.”

Path has toyed with microtransaction monetization efforts before, like Instagram-esque photo filters for purchase. But Morin tells me that, in one day, stickers had already made more revenue than photo filters did in a year. It’s the type of experiment that must be quite emboldening, as Morin sets his sights on an even grander monetization scheme in the coming year: Paid subscriptions.

“It’s the difference between reading a free newspaper and reading Fast Company magazine,” Morin says. “I think people appreciate things they pay for and value them more over the long term. It’s much harder to drive value that way, but if you can do it, it’s an incredible long-term investment.”

I don’t know if the strategy will work for Path--if people aren’t using the service, it’s hard to imagine that people will pay to not use the service. But truth be told, I’ve long wished Facebook and Instagram would just charge me already, rather than lawyer-tweaking wave after wave of TOS changes to sell away more and more of my personal life.

I wonder if Path has a sticker to express that.

Download Path here.

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