Gamification Startup BigDoor Media Levels Up to Bigger Digs, Keeps on Hiring

8/8/11Follow @curtwoodward

Can a company that hands out digital coins make real money? That’s the idea at Seattle’s BigDoor Media, a growing startup playing in the burgeoning field of gamification. In case you’ve missed it—which is possible, since the phenomenon is really less than two years old—gamification is the video game-inspired idea that businesses can get users to stick with digital content by giving them virtual coins and other rewards.

So, if your teenage daughter checks in to her favorite celebrity gossip site for the third time in a day, she could earn some digital bling that can be traded in for real swag, like a T-shirt or free song download. Sharing that activity with her friends through social networks earns even more.

All of those virtual transactions allow content owners to collect more data about their users and keep them coming back, and open up new ways of collecting advertising dollars. And BigDoor not only provides the system, but actually plays the game itself. It’s free to implement for publishers, with BigDoor taking a cut of the virtual currency as it’s dispensed and when it’s redeemed.

“At the end of the month, we trade that in for real dollars,” co-founder and CEO Keith Smith says. “And if we’re doing our job right, we have added enough new sponsorship dollars into the overall economy where we’re actually writing publishers a check, instead of them writing us a check.”

Competitors include Bunchball, Badgeville, and iActionable. BigDoor didn’t actually start out in the gamification arena. As we reported in 2009, the original idea was to give online publishers a popup-oriented way of drawing data and selling ads. That was a few months before game designer Jesse Schell gave a now-famous speech about gamification, a talk pointed to as one of the key moments in kicking off the trend.

BigDoor is certainly going all-in now. The company has raised about $5 million, with investors including Foundry Group and Founder’s Co-op. After taking up increasing amounts of desk space on the main floor of the Founder’s Co-op/Seattle TechStars office in South Lake Union, BigDoor recently relocated to its own suite on the building’s main floor (the landlords actually had to take out a wall to get them in there).

Now up to about two dozen employees and 200 active customers, BigDoor is testing its gamification platform called “the engagement economy” in a private beta. That’s the main driver of the company’s growth, which includes an ongoing talent search.

“We’re pretty much going to bust out of this place already. That’s our next worry,” says chief operating officer Ring Nishioka. (Nishioka, Smith, and co-founder Jeff Malek are all veterans of Zango, the former adware company that grew quickly and crashed back to Earth over concerns about invasive software. Check out our original BigDoor profile for the founders’ lessons from that episode).

I stopped by the new office late last week to see what was behind all the moving and hiring, and hear what kinds of things BigDoor was learning about this new way of making money for online publishers. One of the first things I wanted to know was Smith’s response to critics who say that gamification is quickly becoming an over-simplified approach that amounts to just slapping points and little achievement badges on any conceivable online activity, to the point where it’s just more Internet clutter.

“Is this stuff going to get old? I think if everybody just had points and a badge on every single site, yeah it’s kind of like, ‘so what?’” Smith says. “And I think we’re seeing that with Foursquare now—Foursquare now is a million leaderboards of one.” Smith notes that Foursquare is starting to turn away from just purely rewarding people with digital swag for “checking in” to locations, saying that it expects to make most of its future revenue from serving data to merchants.

So how do you do this gamification thing correctly? It’s so new, Smith says, “the thing that we’ve learned is that we don’t know anything. Everything needs to be tested and every community is different.” That said, here’s a few lessons from the beta-test of BigDoor’s “engagement economy.”

REWARD ME RIGHT
“If you’re going to give rewards to a user, it has to be something that’s authentic, that doesn’t just feel kind of bolted on to the site. It has to be authentic and a part of the overall core experience, and has to be something that really complements the reason why the user is there in the first place,” Smith says.

One example of that from BigDoor’s tests was with a website that targeted a generally teen, female demographic. Giving those users a digital download of a hot pop song, for instance, was far more popular as a reward for their virtual coins.

“The idea of shipping a T-shirt—yeah, that’s kind of cool, but I have to give you my address and that feels odd and adds friction,” Smith says. “Where I could download this (song) right now put it on my iPod.”

CHEAP AND EASY
Perhaps not totally surprising as the economy struggles to come back to life, but online publishers aren’t exactly keen about throwing money at a new, developing technology or having their own people diverted to dealing with any glitches. They want the engagement and revenue and analytics, but want it cheap.

“No money, no time, no resources,” Smith says. “Whether it’s a Fortune 100 company or a little tiny startup, we hear the same exact story from all of them, which is: ‘Don’t bother our developers. They’re busy for the next 18 months.’”

THEY WANT TO SHARE, WITH A PRICE
Users generally don’t want to be turned into human spam-bots by blabbing to all of their friends online about joining a new service, but if they can earn some rewards—and know their friends will, too—that cuts down on the ickiness factor.

“What’s surprised me is the willingness to share, like, and tweet when rewarded for doing so,” Smith says. But that also means BigDoor has to ensure people can’t game the system. “We go to great lengths to make sure we control the amount of points that people can earn from repetitive tasks. They can’t just sit there and hit the ‘like’ button and earn a bunch of points.”

FRICTION IN THE RIGHT SPOTS
People who come from online marketing, Smith says, have been trained to get friction out of the system for users. Gamification, however, is about using friction to your advantage.

“When you think about a game, a good game is just filled with a bunch of artificial obstacles … but that’s part of the challenge and the fun,” he says. “One of the things that’s been really interesting and enlightening is figuring out where are the appropriate points to continue that friction, and to actually add friction, because it makes it more fun and more engaging—and where are the points were you need take that friction out? … I certainly don’t think we’ve gotten all of that balance right yet. But the analytics are taking us in the right direction.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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  • http://dynamopr.com Paul Cockerton

    Just want to suggest a correction.

    Gamification isn’t solely about giving users ‘rewards’ such as coins, nor are its routes entirely in video games. To describe it as such underplays the the effect that gamification can have in growing business.

    Gamification is much more about using the mechanics that exist in games – such as having a goal, having voluntary participation, getting continuous feedback, and having a set of understood rules – incorporating them within a business so that customers engage through a game process and thus (the argument goes) help businesses / services / websites grow faster.

    A good read on the subject that I’d recommend is Reality is Broken, by Jane McGonigal: http://www.amazon.com/Reality-Broken-Games-Better-Change/dp/1594202850

    • http://on.fb.me/curtwoodward Curt Woodward

      Thanks Paul! I was mostly trying to simplify the whole thing down to one clause for brevity’s sake in the lede, but you are correct that there are broader game mechanics/dynamics at play in the field overall. I hoped to include that broader perspective later on by linking to the Jesse Schell talk from DICE. But your description here is quite good.

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