Lithium Helps Companies Rev Up Customer Support by Deputizing ‘Superfans’

9/29/11Follow @wroush

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convince more customers that the extra expense of building a Lithium-powered community will be offset by reduced costs for other forms of support, or by improved word-of-mouth marketing by happy customers.

If you ask Fong whether he ever expected to be running an enterprise software company, his answer is “never in a million years.” Back in the mid-1990s heyday of first-person-shooter games like Doom and Quake, Lyle dropped out of college at UC Berkeley to play full time with his brother Dennis. The two won dozens of tournaments, and Dennis got into the Guinness Book of World Records as the world’s first professional video gamer. He even won a Ferrari.

But to turn their passion into a real business, the brothers decided to start a community site called Gamers.com. Offering a combination of industry news, game reviews, strategy tips, and discussion boards, the site grew to be the Web’s second-largest gaming community, behind Yahoo Games. Lyle was chief technology officer, and he says he spent part of every day analyzing user statistics and tweaking the sites’ features to increase stickiness and reduce churn. “We learned a lot about consumer behavior and incentivization,” Fong says.

Because Gamers.com was a geek haven, “On the bottom of our pages we would have a version number—2.05b or something nerdy like that,” Fong says. One day Fong got an e-mail from an executive at Dell who’d been hanging out on the Gamers.com forum for Asheron’s Call, one of the early massively multiplayer swords-and-sorcery games. “He took the version number as an indication that maybe we had a product, and he said ‘I think we can apply this at Dell. Can we license it?’”

Fong said yes, and the executive used the software to set up a Dell customer support community, running on an unofficial server under his desk. “It was a huge success,” Fong says. “Now Dell had a place where their customers could talk about anything they wanted. There were thousands of people hanging out there on a daily basis, asking questions like ‘Hey, I can’t get my LCD to display at the right resolution.’ It won several company awards and Michael Dell became a big proponent of it in his keynote talks.”

That was when Fong realized that a spinoff company focused on community software for customers might be even more successful than Gamers.com. He formed Lithium in late 2001, with Michael Thouati, a former vice president at Kodak’s Ofoto photo-sharing site, as co-founder and CEO. Dell was Lithium’s first paying customer. Soon Sony came on board, creating a community for PlayStation users, followed by Roxio, the maker of CD-burning software.

“We bootstrapped the business,” says Fong. For the next six years, Lithium grew organically, increasing its customer base by 50 to 100 percent per year and winning big accounts like AT&T, Motorola, and Nokia. But by 2007, Fong felt it was time to really hit the accelerator. “It was clear to me that [Thouati] wanted to build a lifestyle business, have control, and grow it organically,” he says. “I wanted to go out and build the next Salesforce, the next Omniture, or fail doing it. The market was ripe for that. He agreed and I took over as CEO.”

Under Fong’s leadership, Lithium raised tens of million in venture funding, and became known for the way it uses escalating rewards and other concepts from the game world to encourage its clients’ fans to become superfans and share their knowledge with others. Today that would be called “gamification,” but for Fong it was just a natural legacy of Lithium’s roots in the game community.

Take a case like KachiWachi as an example. After answering a certain number of webcam questions on the Logitech forums, his name on the site might change from … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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