Building a Sustainable Startup: Guest Post on C-Suite Insider

This week I had the honor of writing a two part guest post on CSuiteInsider.com about how you can tell if your start-up is heading in the wrong direction and what founders can do to boost their chances of building a sustainable business.

You can read my first post on how to figure out if your company is heading toward a premature end here.  And the second post on the ways to improve your likelihood of success here.

Both posts focus on the following nine critical success factors:

1. Get Lots of Customer Feedback
2. Know Your Fanatical Early Adopters
3. Focus on Your Company Culture
4. Bring Together People with Diverse Skills and Backgrounds
5. Find a Problem that Matches Your DNA
6. Make Sure You Have the Right DNA for the Solution
7. Do Not Focus on Advertising Revenue
8. Find Paying Customers
9. Be Paranoid

I learned the importance of these success factors the hard way advising and working at several early stage startups. I have seen first hand how brilliant well-executed ideas can lead to wasted time, money and effort when those ideas are not validated by customers early and often. I've experienced how petty politics can threaten to destroy a what you're working so hard to create, and how replacing dysfunctional team members can reignite the sense of passion and purpose that make real breakthroughs possible. I know that early revenue streams is where the rubber meets the road whether you are trying to bootstrap using your own savings and credit or trying to get better terms from angel investors or VCs.

What are the warning signs that you look for? What are the key things that you do to make sure your company stays on track?

Gamification Consulting Boom Revisited

     Last year, I predicted that 2012 would be a big year for gamification consulting. This trend seems to be in full swing with consulting heavyweight Capgemini's recent announcement that they will join with gamification software provider Badgeville to accelerate large scale enterprise transformation.

     In a joint press release with Badgeville, Capgemini Consulting's VP of Digital Transformation, Maggie Buggie said:

"The bringing together of Badgeville's gamification expertise with our track record in large-scale strategic transformation is very exciting. Large and complex digitally enabled business transformations are often dependent on a significant cultural and behavioral shift, and the use of smartly-applied game mechanics as part of a behavioral change program can tackle that need in an innovative, engaging and meaningful way. Today's announcement also demonstrates Capgemini Consulting's commitment to innovation and our leadership in Digital Transformation."

     In the press release, Capgemini sites studies with the MIT Center for Digital Business as a motivating factor for this partnership. According to their studies, companies on the leading edge of digital transformations invest significantly in the soft side these efforts.  Gamification offers a creative and innovative way to foster collaboration around strategic priorities.

Gartner Hype Cycle

     Another unstated factor that may have been at play is the growing feeling that most gamification projects are poorly designed and would fail to meet their business objectives. Just last week, Gartner predicted that 80% of current gamified applications would fail by 2014 due to this reason. Gartner stated that "Gamification is being driven by novelty and hype." Thus, on Gartner's hype cycle, I'd place the industry somewhere on the peak of inflated expectations but sliding into the trough of disillusionment. This point is where seasoned consultants like Capgemini can help speed the gamification industry's transition to providing true productivity gains. Capgemini and other consultants can bring focus to "the more subtle and more important game design elements, such as balancing competition and collaboration, or defining a meaningful game economy" that Gartner finds missing from poorly designed gamification initiatives.

    The Gartner report combine with the Capgemini announcement indicate that the gamification industry is maturing but still isn't out of its awkward growth stage.

How to Make Love to Your Customers

Fanatical Customer Intimacy as an Organizing Principle for Startups

     In The Discipline of Market Leaders, authors Frederik Wiersema and Michael Treacy argued that market leaders succeed by narrowing their business focus, not by broadening it. Specifically, companies gain by concentrating on one of three value disciplines--operational excellence, customer intimacy, or product leadership--and aligning their operations behind their chosen discipline. For example, by focusing on logistics, companies like Walmart become market leaders on price. By focusing on R&D, companies like Apple become product leaders. Finally, companies like Disney become leaders in customer experience by focusing on customer intimacy.

     One of my favorite presentations from the Warm Gun design conference this year was made by Kevin Hale, one of the founders of Wufoo, on how they used customer intimacy as the organizing principle for their company.

According to Hale, Wufoo decided from the start to build their company around the discipline of customer intimacy. They became fanatical about creating meaningful relationships with their users and in particular building those relationships by eliciting positive emotions, not by just appealing to rational ideas. This interest lead them to the science of creating and building long-term relationships and to applying dating research to new users and marriage research to existing users.

     Wufoo is an freemium online form builder that was acquired by Survey Money in 2011 for $35.0M. This acquisition netted Wufoo investors a 29,561% return on their investment of $116K. At Warm Gun, Hale described of the secret to their success.

First Impressions
Setting the right tone at the start of a relationship matters

Cutting Cookies with a Metal Press

A Deeper Look at Richard Bartle's Player Types, Part III

Cookie Cutter Overkill

"Don’t use a metal press to cut cookies!"
- Richard Bartle, Multi.Player Conference Keynote, July 21, 2011

Richard Bartle does not mince words when he describes how his landmark player type model has been misapplied by others. He used the metal press analogy above to describe how the gamification industry often applies Bartle's model without adapting it to fit the context.

If you're not familiar with Richard Bartle's Player Type model, part one of this series delved into the definitions of each player type, how players of different types interacted with each other and amongst themselves, and how multi-user games need to achieve a balance between types.  In part two of this series, we looked at Bartle's full model and how players move between types.  We also investgated how to design applications that support the entire user life cycle.

In part three, we delve deeper into Bartle's own critiques about the misuses of his theory and discuss a framework for how players types might be properly used outside of the narrow confines within which Bartle's model was originally conceived.

What Bartle Says

Player Types: Watch for Moving Targets

A Deeper Look at Richard Bartle's Player Types, Part II

[This blog was also posted on http://gamifyforthewin.com.]

Since the Bartle Test of Gamer Psychology was created in 1996, more than 740,000 people have taken it. Gaming circles have seen the old saw "What's your sign?" transformed into "I'm an KEAS. What's your type?"  For example, I found this comment on a gaming blog:

"So I took the test again today.
Apparently I’m a little bit more into PVP these days and a little bit less in socializing.
Killer 93%, Explorer 60%,  Achiever 33%, Socializer 13%"
                                                              --Loregy.com

This comment hints at a two interesting subtleties about Bartle's player type model.  First, most players exhibit a combination of all four player types, and second, and just as important, players may change their type from time to time.  In fact, as we will see, players will often move through a predictable progression of types over the course of playing any given game.

If you're not familiar with Richard Bartle's Player Type model, my last post delved into the definitions of each player type, how players of different types interacted with each other and amongst themselves, and how multi-user games need to achieve a balance between types.  The fact that players often exhibit behaviors of all four types provides another reason to avoid designing applications that don't cater in some way to all of the player types.  In this post, we'll take a deeper look at how Bartle's full model explains the movement between types. 

Expanding Bartle's Original Model
Bartle's original model mapped players on a two-dimensional grid with the two axes expressing each player's degree of preference for acting on or interacting with the game world itself or its players.[1]  In his 2005 paper "Virtual Worlds: Why People Play", Bartle notes that there were several flaws in this model:

"Although this model has been generally accepted as a useful tool among designers, it
nevertheless has flaws. Two are of particular importance. Firstly, it suggests that players
change type over time, but it doesn’t suggest how or why they might do so. Secondly, all
of the types to some degree, but especially the one for acting on players (that is, Killers),
seem to have sub-types that the model doesn’t predict."[2]

What's the Big Deal about Bartle's Player Types?

A Deeper Look at Richard Bartle's Player Types

[This blog was originally posted on http://gamifyforthewin.com.]

Achievers are motivated to win.  Explorers like to discover the intricacies and secrets of their world.  Socializers enjoy human interaction, helping others, and building alliances, while killers like to dominate those around them.

If you've played any kind of multi-player game or been involved in a community organization (whether online or in the real world), you've run into all of these player types.  This player typology was developed by Richard Bartle, a multi-user dungeon (MUD) creator and academic, during the 1980's and formally published in 1996.  Since then Bartle's Player Types has become one of the best known design patterns in online gaming and in the burgeoning gamification field.

The appeal is clear.  Player types provide application designers with a new way to look at psychographics and motivations and at the different ways we have fun. Once they understand Bartle's typology, designers can easily enable specific social interactions targeted at each type.  Amy Jo Kim provides an excellent an example of how to do this in her Gamification 101 workshop:

Amy Jo Kim's Social Actions Matrix

In this series of posts, we will be taking a deeper look at Bartle's player types.  We will look at his original 1996 treatise and subsequent writings and explore why Bartle's typology has been more appealing and enduring that other possible models. 

What Bartle Says

7 Steps to Successful Gamification

Last October I wrote about the impending consultification of the gamification industry.  I predicted that consulting and professional services would become an increasingly important part of the gamification industry.  At Gamification Summit in June 2012, Venture Capitalist Tim Chang described this trend in context of previous technologies:

"The best gamification is done seemlessly.  It's built into the core of the product and experience, and it is aligned with the business' goals.  You don't just slap it on and hope that it fixes user engagement or conversion rates. If it is, it looks really cheesy.  Users see through it.  They develop an immunity to it and they don't want to see any more of it.  So, that's why the know how of how to apply gamification is probably even more important than the technologies and tools behind it right now.  That's always true in embryonic industries.  It was the same for CRM, analytics and all these other fields as well."

"People don't really want self-service tools.  They want you to tell them what to do."

Gamification done right is not easy.  It requires the integration of complex systems and uses engagement strategies and tactics from a diverse set of disciplines from sociology and psychology to human computer interaction design and of course game design.  Furthermore, unlike other enterprise software projects of the past which required large up-front efforts and minimal work to maintain, gamification typically requires as much effort to monitor, maintain and update as it does to launch.

The 7 Step Plan
The seven step process that follows can help manage this complexity and move gamification projects from promise to reality.  I developed these steps based on my work with clients and lessons learned from designing and managing games at Fastpoint Games.  They also incorporate many of the concepts first articulated by gamification pioneers Amy Jo Kim, Jesse Schell, Gabe Zichermann, Mario Herger, Nir Eyal, Nicole Lazzaro, and Jane McGonigal.

GSummit: Gamification Industry to Grow 150% in 2012

Wanda Meloni presented the latest gamification industry market research from M2 Research at the GSummit in San Francisco in June. M2 estimates that revenue in the consumer and enterprise gamification market would grow to $242 million by the end of the year, which represents over 150% growth year-over-year and would reach over $2 billion by 2016.

Industry Segmentation
M2 also reports that in 2012 the enterprise gamification will represent 38% of the market compared to 10% in 2011. In fact corporate initiatives represented the largest market segment (25%). The entertainment and media segments followed at 18% and 17% respectively.  Consumer goods and retail segments came in at 10% and 9%. Telecom had 5%. The Health & Wellness, Education and Financial all had 4% share with government and utilities each representing just 1%.

Survey of Platform Vendors
Ms. Maloni also present results from M2's survey of four gamification platform vendors (Badgeville, Bigdoor, Bunchball, and PugPharm).  The first part of the survey asked each vendor to specify the features they currently supported across several different categories.

Note: Leading vendors are the ones that currently have the most complete set of features for a category. Additional features include mobile support, user groups, consulting support, education, maintenance and marketing support.