Novel, Backed by Vancouver VCs, Uses Gaming Tech to Make Business Simulations for Companies

What would “The Matrix” look like for businesses? Imagine a virtual-reality system that a company could jack its employees into in order to train them, evaluate their decision-making skills, or test out different management strategies. The technology might not be as far off as you think, thanks to a Seattle-area startup.

This is the story of one of the most intriguing and entertaining companies I’ve heard about in the past couple of years. Please excuse my lack of objectivity here. I’m talking mostly about the company’s core idea, not so much its business prospects (more on that later).

First, the news peg: Novel Inc., a 20-person startup based in Redmond, WA, has raised an undisclosed amount of first-round financing from McLean Capital and Nairbo Investments, a couple of venture capital firms in Vancouver, BC. The big idea behind the company is to apply massively multiplayer online (MMO) video-game techniques to create new kinds of games and business simulations for companies.

“I look at Novel as being a leader in the future of virtual reality,” says Brayden Olson, the company’s co-founder and CEO. “If we can help businesses with simulations, it can put us in position to be at the cutting edge of R&D.”

Here’s what that might look like. A company might evaluate its prospective employees’ leadership and teamwork skills by having a group of job candidates enter a game-like computer simulation where each person controls a virtual character. The simulation would present the group with various management problems, or other business situations. By watching how each person performs and interacts with others, the company could potentially learn more about them than it would in a run-of-the-mill interview. And if done right, it could be more time-efficient as well.

Brayden Olson

OK, this system doesn’t quite exist yet. But what makes it viable is that the technology and user interface are grounded in Novel’s multiplayer online video game engine—it probably won’t require a quantum leap in tech development. And that seems to be one of the company’s key competitive advantages.

The idea of using virtual reality and gaming technologies to create training exercises and work-related simulations is not new, of course. Organizations ranging from the military to Microsoft Research have pursued such projects for more than a decade. And Second Life, an example of a 3-D virtual world, has become a sleeper hit inside some big companies as an efficient tool for collaborating and teleconferencing. In recent years, computer interfaces have gotten faster and easier to use, graphics have become more dazzling and realistic, and online multiplayer games have taken off. Those factors all seem to be in Novel’s favor.

The company, previously known as Novel Interactive, officially formed at the beginning of 2009. Olson, its 22-year-old chief executive (see photo, above), is a recent graduate of Seattle University, and has gotten national press in BusinessWeek and a New York Times blog for winning a regional entrepreneurship award, and for competing in a business plan competition. The buzz around him is that … Next Page »

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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