Gamification as a concept in the broader business world is still in the toddler stage. But that’s soon enough for a little consolidation, right?
Guess so. Today, Seattle’s BigDoor Media is announcing the acquisition of San Francisco-based OneTrueFan, a company backed by 500 Startups that uses game mechanics to help website publishers keep their audience plugged in. BigDoor says the merger is “the first of its kind in the gamification space.”
Terms of the deal weren’t disclosed. BigDoor is still pre-revenue as it wraps up tests on its “engagement economy” white-label platform for large publishers. But the startup has raised about $5.5 million from investors including Boulder, CO-based Foundry Group and Seattle’s Founder’s Co-op, with most of that money announced last June. OneTrueFan’s CrunchBase profile says it raised $1.2 million in a seed round last September.
When I last checked in with BigDoor co-founder Keith Smith, the startup was up to about two dozen employees and had just relocated to the ground floor of the Founder’s Co-op/TechStars building in South Lake Union to accommodate its growth.
With the OneTrueFan acquisition, BigDoor is adding five more people, including OneTrueFan founders and co-CEOs Eric Marcoullier and Todd Sampson—but they’re not moving in.
OneTrueFan’s team will instead be BigDoor’s new Bay Area branch, adapting its technology into a BigDoor-branded service for “long tail” niche publishers to build audience engagement—and therefore advertising revenue. BigDoor plans to make money by getting its own advertisers to sponsor “quests,” or little virtual tasks that can be rewarded with badges and other trinkets, Smith says.
Up at the BigDoor mothership in Seattle, they’ll continue working on the “engagement economy” platform for larger publishers, which sounds like it might be ready for primetime in the coming weeks. Expertise from OneTrueFan’s team will help grow and improve that product as well. BigDoor is currently working with about 300 publishers, Smith says.
The two teams already had a fairly close relationship, helped along by Brad Feld of the Foundry Group, who sits on BigDoor’s board and is friends with Marcoullier. The OneTrueFan co-founders have some startup chops as well: Marcoullier was a co-founder of the game site IGN, and worked as co-founder with Sampson on MyBlogLog, which was acquired by Yahoo in 2007.
“They were deep, they were thoughtful, they were fun, they were quirky—they were weird as hell,” Smith says with a laugh. “I just really liked them.”
The growth of gamification has come “out of nowhere,” Smith says—a fact that speaks to the scramble content publishers are facing to make money on their online properties in an age of declining ad revenues.
“What’s interesting about it is, from a startup perspective, the hype around gamification has been fantastic for us because what its done is it’s landed a ton of great partners at our doorstep wanting to learn about gamification,” he says. “The downside is that with that hype comes a fair amount of cynicism. And in many cases, rightfully so, because I think a lot of the solutions that have been out there to date haven’t done a really good job of moving the needle … for businesses.”
BigDoor’s platform, however, is doing very well in tests, Smith says. In its beta test, BigDoor has seen users return to sites, stay engaged, share their experiences and register for a given site in far bigger numbers than the startup expected.
Users who get rewards through the BigDoor loyalty program, for instance, are 300 percent more likely to return to that site than users who aren’t being rewarded, BigDoor says—and overall site engagement goes up by 30 percent.
“It’s far better than what we expected,” Smith says.
