From product to platform (why Hipster sucks and Contently doesn’t)

Contently versus Hipster

What makes a successful product? It’s the question that people all over the world try to answer, day after day, month after month, year after year. And not just in the technology sector. But at the moment, it’s the technology sector that should be looking hard at itself. The last two years have seen a few so called ‘products’ garner heavy investment from venture capitalists, when, in reality, there has been very little to invest in. Color raised $13 million in Series A funding in 2010, only to fail with its ‘revolutionary’ take on social photo sharing. Hipster had more technology press coverage than if the Pope got caught in a girl’s school gym locker, only to underwhelm massively on launch (yes, they were bought by AOL last week, but since when did AOL make something work?) Jason Freedman’s post from the 8th April highlights some of these issues, and this from the perspective of the start-up.

That’s not to say that there is anything wrong with failing. The ability to companies to ‘pivot‘ their products shows an agility and a will to succeed that is admirable; it is a lesson we should all learn. Both Color and Hipster have done this, but I think we should ask some serious questions when we see the amount of money invested in these products.

What does make a successful product?

Facebook logoThe true measure of success is to make the transition from product to platform, that’s where the real money is. On a day that saw Facebook ready itself for a May 2012 $5 billion IPO, we can see the real effect of this transition. Facebook has made the jump from a standalone social network – if that’s not a oxymoron – to a platform upon which many other brands and products depend. From social reading apps to gaming, Facebook facilitates sharing and communication; it provides the infrastructure behind the social in the same way as switches and routers are the infrastructure behind the internet.

They’re not alone in making this transition. Here are some other examples:

Amazon

Amazon started off selling books, plain and simple. But it has evolved into the shopping platform. The introduction of Amazon Marketplace, giving other sellers the ability to sell directly through Amazon to its userbase, was the turning point. Amazon no longer has to source all its goods – although it still does – as it can generate revenue from the transactions that flow through its shopping platform.

iTunes

Steve Jobs took a different approach when building iTunes – he started with the device, the iPod, and used it as the basis for building a closed infrastructure for purchasing music, TV and films. It’s not an open infrastructure in the way Amazon or Steam is, but due to the ubiquity of Apple devices (phones, music players, tablets, laptops or desktop), it doesn’t need to be. Now, being on iTunes is essential for content producers.

Steam

Steam started with Half-Life, the smash-hit game from Valve. Following the hug success of the first game and its expansions, the sequel was launched with the Steam platform baked in: installing Half-Life installed Steam. The reaction wasn’t great at the time, but it was a shrewd move. It’s large initial userbase meant that Valve could now use its platform to deliver games from other publishers, taking that all important percentage cut. This in turn has allowed Valve to innovate: the platform funds game development, including hits such as Portal 2, and allows new business model, such as the one found in Team Fortress 2. Team Fortress went free to play last year, but has its own in-game (in-Steam) marketplace where players can buy additional content (yet another revenue stream). In 2009, Steam was estimated to have 70% of the digital games distribution market.

Google

And of course there is Google. Google’s control of the search marketplace has enabled it to create the most powerful ad platform in the world.

Hipster and Contently

So why does Hipster suck? Simply because they went to market with something that can never make this transition. The ability to create postcards doesn’t make for a platform, just an interesting application of existing technologies. Hipster was built only to be a talent or IP sell – short-term.

And why doesn’t Contently? I believe that Contently has found a niche will allow it to transition – albeit in a limited fashion. In an environment where content is becoming more and more important, Contently is positioning itself as the glue between the content makers and content consumers. By putting writers in direct contact with publishers, they creating a commercial relationship that has legs. If they develop it in the right way – thinking of themselves as representing all groups of content producers, not just writers – they have the opportunity to be come a pivotal service in the new content economy. For me, that’s admirable.

Whether Hipster or Contently are successful in the long-run, only time will tell, but I know who I’m supporting.

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What is… Gamification?

There’s been a lot of talk about the subject of Gamification recently; it’s the buzz topic in marketing and its impact will most likely grow over the next couple of years. But what is it? And what does it mean for marketers?

Gamification – it’s not making games

There’s a misconception that Gamification is all about making games. Let’s be clear: it isn’t. This is an oversimplification. We’re not trying to create the next Angry Birds for our clients, for a number of reasons. One, in a technical sense, it’s very difficult to do well. Two, actually creating a game around a brand isn’t simple. A good game would resonate with the brand’s identity and ethos. It’s much easier for a sports brand to create a game than a computer hardware brand. So, if it isn’t gaming, what is it?

Team Fortress 2 from Valve - achievements and rewards drive gamer loyalty

Gamification is the process of using gaming methodologies to create a connection to the user. When playing games, we are constantly rewarded for our participation. This can be through gaining achievements, opening up new areas or levels, or by achieving some sort of status. Here are some examples:

  1. Team Fortress 2 by Valve – in team-based first person shooting game you are awarded achievements for in-game actions. Reaching milestones for the number of opponents killed, or for capturing places on the map, are rewarded with a cheer and in-game fireworks above your character’s head. Your achievement is not just recorded on your record, but is broadcast to all the other players as well.
  2. Angry Birds by Rovio – this also utilises the achievements reward structure, but at its heart it is the episodes and levels that keep us hooked. The game is split into a number of themed episodes, each containing a number of levels. Completing a level opens up a new level, until we complete the episode and unlock the ending movie. We always feel the pull of ‘Just one more level’.
  3. Farmville by Zynga – this popular Facebook game uses statuses to differentiate players’ progress in the game. As the player moves through the game and gains experience points, their title changes. Starting off  as a simple ‘Field Hand’, they can make their way up to ‘Master of Pasture’ or ‘Lord of the Plough’. Your title is a direct indication of your status within the game, and a something that is aspirational.
Gamification works within games, but how does this translate onto non-gaming platforms, especially those for marketing?

Gamification for the masses

There are some great examples of gamification being used on non-gaming platforms. The most well-known exponent of which is:

Foursquare

Foursquare has made strides lately to widen its offering, but initially its appeal was mostly reliant on it game-based mechanics. The aim of Foursquare is to reward consumer loyalty with location-specific deals and discounts, strengthening the bond between the purchase and the brand. They use gamification to enhance that experience and drive user behaviour. Let’s see how it works.
Users on Foursquare check-in  to their current locations using an application on their mobile phone, leaving an optional comment at the same time. A location can be anything from a coffee shop to a workplace, a shop to a sports stadium. This action has a number of effects:
  1. The user builds up check-ins at the location. The user with the most check-ins becomes ‘Mayor’ of the location
  2. The user gains achievements based upon the location they are checking into and the number of check-ins they have made in total. i.e. they receive the ‘Newbie’ badge for their first check-in, the ‘I’m on a boat’ achievement if they check-in whilst over water, and the ‘Local’ achievement for checking-in at the same place three times within a week.
These rewards create a strong connection with the user, as they strive to gain them. The ‘Local’ check in above is particularly powerful for local businesses, as the need to gain the achievement directly ties the user to their business.
Here’s Katie Colbourne, a friend and ex-work colleague of mine, using Foursquare, thanks to Katie for her permission to use these tweets.

In the first tweet, Katie checks-in at her workplace, and by doing so becomes the Mayor of that location (the second tweet). We can see here that the gaming behaviour – the ability to create ‘feel good’ moments through a rewards-based system –  has translated directly into user action. This, along with the added real-world achievements such as ‘free coffee for the Mayor of Coffee & Co.’ , provide can create motivation and loyalty within consumers in a way that group-buying platforms cannot.

As a marketer, can I use this?

Absolutely. Good marketing brings consumers closer to the brand, generating advocates and ultimately sales. Gamification creates the ‘stickiness’ between the two, and can be used within marketing practice. There are two approaches that can be taken:

1. Apply these ideas to your own product or service

This is the more involved approach, but can be extremely rewarding. Marketing Tech Blog provides some good tips on how to create a gamification strategy for your site or application. In essence, this consists of creating a series of goals (CTAs) for your user and then providing a series of actions to attain that goal, awarding points and achievements along the way, and always tracking their progress.

2. Use existing ‘sticky’ products in your campaigns

Foursquare can drive consumers to purchase using gamification techniques

This is the easiest approach. Going back to Foursquare, we can see that brands are leveraging their userbase and rewards system to their advantage. Brands can now create their own pages on Foursquare and create brand badges which users can earn. Macy’s, CNN, and Toys ‘r’ us have all used this in their marketing campaigns.

As well as the introduction of some sponsored badges, their is also the simple process of linking reward to action, as discussed earlier i.e. if you are the Mayor of my shop, I’ll give you a free coffee every day.

Where can I find out more? What are my next steps?

There’s a full explanation of gamification at Wikipedia, along with a selection of supporting articles. For those interested in using gamification techniques within their products, sites or applications, please feel free to contact me.