Injecting Fun into Work & Learning: The Lucrative Approach of Gamification

Posted in: Sector and Company Insights, Startups, Venture Capital, checkio, freshdesk, gamification, gigya

Gamification

Traditional game mechanics are being applied to many business and learning applications. Discover why this trend is increasing, as well as 3 successful startups implementing this strategy.

An increasing number of startups are integrating a gamification methodology into their products - the use of game thinking and game mechanics to solve real-world problems or acquire real-world skills. Studies have shown that the use of gamification yields positive results for both the “player” as well as the task or skill to be completed or learned.

The current iteration of gamification is focused on the online and mobile gaming platforms. Whereas early forms of gamification software were developed on proprietary hardware (like the popular children's handheld, Leapfrog), most companies are now developing software for mass adopted hardware, such as the iPad, to reach and educate their target market. This has also allowed the industry to dramatically cut production costs, as the focus today is solely on software and game development.

Additionally, gamification is evolving from children-focused products to mass market adult oriented applications.Companies like Lumosity have subscription-based services that provide users access to learning games designed by neuroscientists, and Scratch, developed at MIT, allows both children and adults to play games that teach them basic programming skills. Analysts project the gamification market to grow to $2.8 billion by 2016 after doubling in size between 2011 and 2012. In this post, we look at three startups that integrate gamification components into educational or business related applications. Each is poised for additional investing or IPO.

CheckiO

The youngest and smallest of the three is 3-year-old Las Vegas, NV based CheckiO. CheckiO was founded in the Ukraine by Liza Avramenko and Alexander Lyabah in 2011. You will recognize another name involved with CheckiO in Tony Hsieh (the founder of Zappos) who invested early in the company via his VegasTechFund outfit (and moved the company to Vegas). Alexander Lyabah was a former programmer, working on well-known products such as Mysqul and Fedora.

Hsieh’s business acumen and Lyabah’s programming experience have allowed the company to develop a product aimed at novice coders that gamifies the coding experience to lessen the initial shock related to getting started with programming. The company’s latest addition to its web-based code-editing platform is a publish-and-share feature, where players can write, design, and publish custom coding missions and then share them across the Checkio community. Those who win the top scores in the leaderboards, which measure the “most elegant” solutions, can win prizes.

Even with a limited platform, more than 40,000 users have already contributed over 100,000 competitive programming solutions to Checkio’s coding missions. The platform enables experienced programmers to complete missions and puzzles in competition with peers — or just to share knowledge. Besides VegasTechFund, other investors include Brightcove co-founder Bob Mason, Acquia co-founder Jay Batson, AVentures Capital, Bob O’Donnell, and TA Venture. Checkio has 10 employees and has [as of this writing] raised $750,000. It competes with CodeCombat, Codewars, and Talentbuddy.

Freshdesk

Next we explore Freshdesk out of San Francisco. Founded in 2010, Freshdesk resides in the “help desk vendor” space, providing solutions to customer service and customer support. The California-based startup had a massive fundraising round in June 2014:

$31 million from three investment firms including Google Capital, which manages money for the software giant. The financing round is being led by Tiger Global Management, which is returning after investing earlier, and includes the venture capital firm Accel Partners, also a repeat investor." (NY Times)

To date, total funding raised is just north of $45M.

The Freskdesk software automatically turns queries across multiple channels (email, forums, live chat, and social media) into tickets, enabling support teams to keep track of and respond to all of their company’s customer queries. The company has recently expanded into the gamification space by adding gaming and scoring components to its current offerings supporting internal service agents. Freshdesk’s “Arcade” is effectively an achievement system, with specific goals for support reps and leaderboards that keep track of points they accrue.. Since its June 2011 launch, Freshdesk has built up a customer base of around 14,000, recently nabbing Sony Pictures, Hugo Boss, and UNICEF, among others.

Gigya

Finally, Gigya - the largest and most established company on this list. Founded in 2006 in Mountain View, CA, Gigya began as a company that added social components to websites and apps. Fast-forward to 2012 and the company started to explore gamification and struck it big by adding the service to its existing product line.

Gigya attempts to make websites, services, and applications more engaging through the use of social gaming mechanics. To do this, it uses plugins that are easy to integrate. Clients that use Gigya are also able to use the social data it collects and feed it into marketing automation systems like HubSpot, Marketo, and others. Gigya currently has over 200 employees and about 700 customers, including WWE, Art.com, AARP, The Atlantic, and others.

Investors have included Mayfield Fund, Benchmark Capital, DAG Ventures, Advanced Publications, Adobe and Greenspring Ventures, which have allowed the company to raise a total of $70M, with the majority coming in the last two years since they expanded into gamification. Recently the CEO of Marketo, Phil Hernandez, joined the Gigya team. Many industry experts believe the arrival of Hernandez signals a future IPO.

We've created a public DataFox watchlist of nearly 100 companies implementing gamification strategies:

Gamification - DataFox