Mar 122011

I just watched the live keynote by Seth Priebatsch, from SCVNGR (say “Scavenger”) at South-by-Southwest Interactive (SXSWI) in Austin, which was streamed on the Web.

Seth made several interesting points about the way “game mechanisms” can help improve how we interact in different situations. Here are some points I retained, which I think are relevant to the current discourse on the importance of social networking and social media in business.

In schools, the current grading mechanism is “broken” because you can slip from a B to a C just because you had a bad day. By contrast, multiplayer games have created a successful mechanism to make people want to succeed: you start with zero points, and you accumulate points as you solve challenges. When you reach certain levels, you are given various titles representing your level of mastery of the subject. Why not use this in education?

For customer acquisition, Groupon has created a great system. It offers deals that seem too good to be true, so there is a catch, but that catch is disclosed on the deal’s page: the discount is only valid if x people sign up. Yet most of the people who get the deal actually didn’t have to do anything: most deals “tip” by 8:00 a.m., so when people read the e-mail containing the offer and go to the site, the deal is “on.”

Location-based services have not been terribly successful yet, in spite of efforts by many companies including Foursquare, MyTown, Whrrl, Gowalla, SCVNGR and others. Seth thinks that the notion of location is too tightly defined, and needs to be “quantitatively eased” (the jargon that some of these people employ can be maddening at times). For example, I shouldn’t be offered a deal in a certain city only when I am there, but also if I have travel plans to go there, or if it’s my hometown, or if I have family there, etc.

To illustrate some of the power of game concepts, the speaker made the audience play a couple of games. One warmup game was to ask people to applaud, then, on a visual cue, they had to switch to clapping in unison. It only took about 15 seconds, in the large Austin Convention Center ballroom with several hundred people, to get everyone synchronized.

The next game was more complex: everyone had been randomly given a flashcard with a different color on each side (out of four colors: blue, red, orange, or green). After a signal was given, they had to trade cards with their neighbors so that each row of people would end up with a single color on the front of their cards. They were not told in advance which color they had to end up with. The room was given 3 minutes to play the game… and succeeded in less than 2. The key factors were (a) there was motivation, as the speaker had announced that if the audience succeeded, SCVNGR would donate $10,000 to the World Wildlife Fund; (b) there was a countdown to force people to act faster, without extensive analysis and planning. The speaker asserted that if he had coordinated the crowd by assigning the colors each row was supposed to end up with, it would actually have taken longer to achieve the color sorting.

Seth’s point was that “gaming mechanisms” (rewards, countdown, etc.) can actually get large communities to solve complex problems, and they could be used better to address large societal challenges. My question to the readers of this blog would be: what is the takeaway for business? Can we perhaps use gaming mechanisms to improve our enterprise architectures? To bring projects out on time? To find and remove defects from software? To increase productivity? Instead of boring and bureaucratic performance appraisals, could be make people “wizards” and “grand masters” based on how many points they earned? Instead of working groups that meet for months via weekly conference calls under the guidance of a professional facilitator, can we get a group of people in a room with a clear challenge, a reward for success, a time limit, a sense of fun, and get better results? Is this what we have not yet, by and large, understood, let alone applied, about the importance of social constructs in business?



  One Response to “Game Mechanisms: the Next Layer in Social Media?”

  1. Claude, thanks for the great note. Gaming mechanisms have been in a dark corner of business and government for some time, yet are poised for wider adoption.

    A widespread use is in the allocation of scarce goods, such as radio-frequency spectrum, which has become standard operating practice world wide. Tracing back to the first FCC spectrum auction in 1994, auction mechanisms are in use in a much wider range of government & commercial applications than most realize, for example, procurement, runway landing slots, energy, internet advertising, commodities, and internet bandwidth.

    The challenge has been to find enlightened leadership willing to seek new ways to apply game theory. Perhaps, as implied by the SXSW speaker, the speed of innovation created by internet social media will help lead the way.

    Shameless plug: we build and license software and services to support complex auctions, which is in use at the FCC, Mexico COFETEL, and most recently Sweden PTS. (

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