I recently attended Cyberposium (www.cyberposium.com) – the yearly HBS tech conference, with speakers from leading tech companies as well as some of the recently hot startups. One of the panels, “Bridging the Online/Offline disconnect”, described how business models such as Groupon and Skillshare use online tools to enhance and disrupt our offline lives. As I was listening to the panelists, I looked around the room, assessing the online tools used by people around me. This is when I came to realize that the “offline” customer, in this in-person conference, was no customer at all.
Around 80% of people around me, including myself had at least one online channel they were heavily interacting with in front of them (quick visual estimation: half smartphones, quarter tablets, quarter laptops).
We were all using Pigeonhole (http://live.pigeonhole.sg), a really cool conference Q&A tool where you get to submit your questions and everyone votes on all questions in a Digg-like system – top questions then get asked by the moderator live at the end of the panel.
Everyone was also following and participating to the series of @Cyberposium tweets to get other people’s reactions, stay updated on major points from the panels happening in parallel, share comments and takeaways, etc.
Taking this conference as a reference point, you realize how much technology has enhanced our possibilities.
It has also, however, decreased the possibilities of the offline person. If you did not had an iphone/ipad, if your battery died, if your 3g signal was poor, you were clearly excluded from the party – you had no way to ask questions (except for some brief last mn “live Q&A” occasions that people were reluctant to grasp), no way to follow the Twitter conversation or participate in it, no voice really. All you could do was maybe exchange brief opinions with your neighbor at the end of the panel, assuming the neighbor himself was not busy tweeting.
This realization raised questions in my mind about business models in general. In this particular case, purely offline customers were not the norm in a tech conference and therefore did not need to be catered for. However, when will we be able, in non-tech environments, to conceive business models that stop bridging the online/offline gap and where it is ok to ignore the offline part? For instance, when should we expect all cash registers to be replaced by smartphone self-checkouts, all restaurant orders to be made via mobile or Microsoft surface-like devices? When will HBS stop requiring all students to speak fluent English because real-time translating devices will be advanced enough? When will the current concept of driver become obsolete?
Looking around me, and comparing our interaction with technology today to what it was 5-10 years ago, I am confident that many industries will witness the near-death of many of their offline components in the coming decade. The key is for us, tech entrepreneurs, to anticipate these changes, understand how they will affect the dynamics in the industries they touch upon, and capitalize on these changes with disruptive business models that are as focused on widening the online-offline gap as the current ones are focused on bridging it.
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In the November edition of the HBR, Misiek Piskorski, an associate professor at HBS, describes his findings on what makes some social strategies work and why some fail ( http://hbr.org/2011/11/social-strategies-that-work/ar/1 ). Failed experiments primarily include companies who “merely imported their digital strategies into social environments by broadcasting commercial messages or seeking customer feedback.” Successful social strategies do one or more of four things: “Reduce costs by helping people meet, increase willingness to pay by helping people meet, reduce costs by helping people strengthen relationships, increase willingness to pay by helping people strengthen relationships.”
The lessons can be applied to an area in which I took an interest a few years ago – school alumni giving.
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I am very loyal to my high school alma mater, but always wondered why my fellow alums gave less to our school after graduation than do graduates at rival private boys’ schools. Most friends adored my high school while we were attending.
Fundraising is increasingly important to sustain school operations. Tuition hikes have made private schools less attractive to middle class and upper-middle class families with talented, would-be applicants. Therefore, applications have dropped precipitously, leaving mostly students from wealthy families to fill classrooms. As tuition hikes far outpace inflation, the annual budgets have prompted schools to draw more and more from their (often modest) endowments. One way to alleviate this problem is through higher alumni giving rates that bolster endowments and fund need-based and merit scholarships. Given the difficult economic environment, fundraising through standard channels (calls from volunteers and school alumni offices) has become increasingly challenging.
I’ve wondered how social media could help allay the problem. One company trying to help schools and other organizations raise money is AlumniFidelity. The company helps alumni and development offices at high schools, universities, churches and other organizations use a cadre of loyal alumni to raise money from disparate networks of alumni. Hence the firm’s slogan that “The finest way to add is to multiply.” AlumniFidelity helps individuals construct a website on the company’s platform to raise money for an institution. The company charges institutions a monthly fee for their services and takes a small percentage fee from all monies raised by individuals. To date, the company has helped raise over $4,800,000 and boasts over 12,600 active donors.
AlumniFidelity has focused on the fourth of the four tactics for successful social strategies. The company lets organizations use a large network (active alumni who act like class agents) to strengthen relationships with their own established networks (former classmates/fellow alums), making it more likely alums will make generous donations. It has made giving a more personal act by coupling the donation with a personal relationship (the fundraiser) that began at the institution receiving the funds. Contrast this with the mechanical feeling of reading a credit card number over the phone to an alum you’ve never met.
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Engaging your Audience with “Gamification”
Overview of Gamification
Your user base is growing complacent. You have difficulty getting them to complete mundane tasks. They are spending less and less time interacting with your product. Sound familiar? Perhaps your product is a candidate for “gamification.”
“Gamification” involves applying game mechanics to non-game applications in order to increase engagement and promote desired behaviors in users. The logic of implementing these elements is that if you are able to capitalize on humans’ predisposition to engage in gaming, you can encourage them to perform and complete those tasks they would not ordinarily… at least not for free, that is.
Incorporating these elements into product design can be helpful to, among other things, encourage users to complete surveys, read content, offer personal data, give feedback, and generate content and ideas (crowd-sourcing).
A popular early example of this technology can be found in location-based platforms (e.g., Foursquare), who having recognized that the utility of their products are a function of both the size and level of engagement (measured by instances of providing location data—i.e., “checking in”) of their audience, implemented game elements (e.g., achievement badges and leader boards) into their systems.
In addition to social applications (e.g., Foursquare), gamification has been successful in task-based platforms like DevHub, which saw an increase in task completion on the part of its users rise from a lowly 10% to an enviable 80% after adding game elements to its site.
Implementation Examples
The success of the aforementioned companies has demonstrated the potential of gamification, spurring a number of companies (across many industries) to implement gamification in their products. Some prominent examples are as follows:
Wellness and health: Nike+ (www.nikeplus.com), Striiv (www.striiv.com), FitBit (www.fitbit.com)
Entertainment: NBC’s The Office (www.nbc.com/the-office), Telemundo (www.msnlatino.telemundo.com/clubdenoveleras)
Non-profit: One Love Foundation (www.1love.org)
Online shopping: Bluefly (www.bluefly.com)
Education: Beat the GMAT (www.beatthegmat.com), Livemocha (www.livemocha.com)
Associated Business Models
Clearly, all of this interest on the part of companies wanting to use gamification techniques was bound to create a need for implementation experts, and it did—a number of these experts have built businesses around developing platforms (Gamify: www.gamify.it, Badgeville: www.badgeville.com, Bunchball: www.bunchball.com) and services devoted to helping companies build gamification into their products.
How to Implement Gamification in your Product</h2>
It’s easy for managers and developers to get excited about implementing gamification and subsequently haphazardly slap game elements (e.g., progress bars) onto existing products. However, without proper design and implementation, these efforts can prove ineffective or worse, sometimes creating confusion or otherwise adding unnecessary complexity to products.
In order to guide managers and developers in developing gamification strategy and implementation, Gartner identified four principal means of driving engagement using gamification:
1. Accelerated feedback cycles: In the real world, feedback loops are slow (e.g., annual performance appraisals) with long periods between milestones. Gamification increases the velocity of feedback loops to maintain engagement.
2. Clear goals and rules of play: In the real world, where goals are fuzzy and rules selectively applied, gamification provides clear goals and well-defined rules of play to ensure players feel empowered to achieve goals.
3. A compelling narrative: While real-world activities are rarely compelling, gamification builds a narrative that engages players to participate and achieve the goals of the activity.
4. Tasks that are challenging but achievable: While there is no shortage of challenges in the real world, they tend to be large and long-term. Gamification provides many short-term, achievable goals to maintain engagement.
Criticisms of gamification
Some experts note that so-called “gamification” is neither new nor novel as it has been around in many forms (e.g., loyalty programs) for years. Additionally, many critics point out that gamification misses many important elements of effective game structure by glossing over storytelling and oversimplifying user experiences. Further, and most important in my view, is the very real risk that users will become so accustomed to these “games” that they will develop even more reluctance to complete mundane tasks—many of which are critical to learning and daily functioning—that do not incorporate game mechanics. The effects of this disenchantment would likely be more pronounced in children and could potentially increase an already apparent trend in children avoiding less engaging activities—especially involving learning.
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