BigDoor Raises $5M Led by Foundry Group, Looks to Bring Game Mechanics to All the Web

6/8/10Follow @gthuang

Score another one for the “gamification” of websites. Seattle-based BigDoor Media said today it has raised $5 million in Series B funding led by new investor Foundry Group, the Boulder, CO-based venture firm co-founded by Brad Feld. Feld led his firm’s investment in this financing round, and is joining BigDoor’s board of directors.

What do techies mean when they talk about gamification? In BigDoor’s case, the company has developed a software platform that helps website publishers and developers build videogame-like mechanics into their sites and mobile applications. That means adding things like virtual currencies, virtual goods, points, badges, and leader boards—all with the goal of driving more people and visits to a website, and strengthening a company’s bond with its customers.

The idea is that by rewarding loyal consumers who contribute comments to a site, say, or upload content such as photos, websites can create “virtual economies” that to this point have been seen mostly in video games (Café World by Zynga) and game-like applications (Foursquare). What’s more, when people are more tightly connected to a site, the thinking goes, they are more likely to buy something from it.

It’s part of a growing trend that seems to be sweeping the tech startup and VC land. Some companies, like Seattle’s Bobber Interactive, are “gamifying” a particular niche sector like financial services for teens. Other companies, like BigDoor, are trying to become the general platform on which game-like mechanics get built across different kinds of websites. “There is big opportunity for gamification delivered as a platform. It’s especially interesting coming from a team so focused on the customer experience,” says Scott Dodson, a game design expert and co-founder of Bobber Interactive.

The deeper idea here is to add a layer of social competition to any given website. This is being tried by fan sites, humor blogs, user-generated content networks, and more traditional media sites. By spending more time on a site, individual consumers can earn rewards, like virtual gifts and access to premium content. “Users have a track record of what they’ve done. We all like to keep score, we like to know how we’re doing,” says Keith Smith, the co-founder and CEO of BigDoor.

Some of BigDoor’s early customers include BuddyTV and Cheezburger Network, a couple of popular Internet companies in Seattle. But already, some 40-odd Web publishers and developers are in the process of implementing BigDoor’s platform, or building applications on top of it, Smith says.

BigDoor previously raised more than $700,000 in seed funding from Seattle-based Founder’s Co-op and angel investors last year, Smith says. The company has a half-dozen employees, and is looking to double in size (or a little more) in the next couple of months. “BigDoor should become the standard platform used by companies to implement game mechanics,” said Foundry Group’s Feld in a company statement. That statement has some extra oomph when you consider that Feld is an early investor in (and board member of) Zynga, the high-flying social gaming company in San Francisco that is a poster child for making money through virtual currencies and related schemes.

Seattle entrepreneur and investor Andy Sack, an existing board member of BigDoor (he also just announced a big new project yesterday), added in a statement, “Game mechanics are taking over the digital world. Foundry sits at the epicenter of this world and this investment is a huge stamp of approval for BigDoor’s platform.” Sack and Feld have known each other for many years; it was Sack who helped get Foundry Group interested in investing in BigDoor.

Founded last year, BigDoor started out by helping Web publishers make money from existing virtual currency and “offer” systems. But most websites still needed to build those systems, so BigDoor quickly discovered “there was a much bigger opportunity by building the platform that powers game mechanics and virtual economies,” Smith says. The company’s new platform went live in February.

Lest anyone think this trend is turning consumers into reward-seeking zombies for no good reason, real money is getting made, in a couple of ways. Virtual currency “really increases virality” of a site, Smith says. That means consumers will tell their friends about it and compete with them to earn points. “That will drive profits for publishers. The other way is, virtual currency leads to direct user monetization,” he says. “The publisher can sell virtual currency, which lets the user see premium content.”

Meanwhile, BigDoor makes money once a certain number of people use its platform on a given site. It also takes a fee on each purchase or transaction on the platform.

But is there really enough demand for this kind of service? “Anyplace where [an online] community exists, there is a real need to differentiate amongst that community, and reward that community,” Smith says. Most publishers think of consumers in terms of those who will pay, and those to show advertisements to, he says. But they have been neglecting two other groups—those who contribute content, comments, or ratings, and evangelists, the people who tweet and retweet articles and share content from their favorite sites across their social networks.

Not surprisingly, Smith is bullish on the whole gamification trend. “Our prediction is that by the end of 2012, half of all sites and apps will use some form of game mechanics,” he says. “That’s where we see the world going.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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