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  • ZICHERMAN: Thanks, Chris. That's a--it's a--it's always funny to hear your bio read out loud

  • because you realize you're very sensitive to every like word--I wrote that bio so I--it's

  • my writing, yes. So, you're very sensitive to every word. And then also, no matter what

  • my accomplishments are, I'm humbled by the quality of your kitchens. I think it's like

  • one day I aspire to have a company that has kitchens like that, where today I made my

  • own espresso, which I'll enjoy for a second. So, as you heard my name is Gabe Zicherman.

  • I do a bunch of stuff around gamification. And today I wanted to talk with you guys about--it's

  • a little bit presumptuous to use the phrase "mastering" with something as new and as slippery

  • as gamification, but we'll do our best. I'm going to share some of the top insights gleaned

  • from researching the book, Game-Based Marketing, which came out in April, work that we do with

  • brands big and small everyday. I work on the Summit and the research that goes into the

  • new book, Gamification by Design, which is, as Chris mentioned, a techbook that will come

  • out at the beginning of the year. So, when biting off a topic like gamification, or any

  • topic for example, I like metaphors. So I thought a pretty good metaphor--I realized

  • that pretty good metaphors can be found in the movie Mary Poppins. And if you're too

  • young or too straight to know this basic story of Mary Poppins, I'm going to recount it for

  • you. It's the story of a hard-hearted but turns out fundamentally nice guy with two

  • really, really, super sweet children, really, really darling children. And they need a nanny

  • so they write up an ad and this woman on an umbrella comes flying into their lives. She

  • has magic powers like being able to levitate or jump into a chalk drawing and at the end

  • all is well, which is an important part of the story. All ends well in the story of Mary

  • Poppins. So think of me as your "Mary Poppins," down the sort of rabbit hole of gamification.

  • I mixed literary metaphors there. Well, if you would like to talk about Alice in Wonderland

  • later, we can talk about that. So, as Chris mentioned, I'm the author of these books,

  • Game-Based Marketing, which you can get now. I blog at gamification.co. It's a gamification

  • blog. We talk all about the subject. I advise startups. I talk about interesting things.

  • And then, as Chris also mentioned, we have some upcoming events related to gamification.

  • If you are currently working on a gamification project, either from a product, or marketing,

  • or design side, you might be interested in November 12th's San Francisco Bay's Gamification

  • Workshp. Amy, Joe, Kim and I will give a hands-on full day, come in with your problems and we

  • solve them working together workshop. It's actually almost sold out but if you're interested

  • in going, let me know. There's really like one seat left at it. And then in January,

  • we're running here in San Francisco again the Gamification Summit which is a full day

  • of--a full day event focused on the subject. Bringing together some of the most interesting

  • thought leaders like Jane McGonagall, who'll be revealing her new book. I'll be giving

  • a keynote on metrics which I know you guys love. We'll talk about all that kind of stuff.

  • Okay, so let's begin with a simple word definition. Gamification is the use of game thinking and

  • game mechanics to solve problems and engage audiences. Four square. Not the product, but

  • the four squares there. So, it's game thinking and game mechanics. And this is really super

  • important, game thinking is the product of three generations of game players. I'm 36

  • years old. I'm the old--hi, my name is Gabe. I'm 36 years old and I'm the oldest cohort

  • of people who grew up with games as a core type of entertainment in their lives. Today's

  • youngest children, you know, kids were--well, the youngest children will be like just born.

  • But kids who are, you know, maybe five years old today are growing up with games as their

  • principal form of entertainment and that multi-generational exposure has simply affected the way that

  • we think. You know, if Shakespeare was a real person--this is the best analogy--if Shakespeare

  • was a real person, he wrote--he or she wrote, "All the world is a stage," famously, right?

  • But if Shakespeare were alive today, wouldn't he have written, "All the world is a game,"

  • because isn't it just a better metaphor for how we think about interactivity in the world.

  • And that really gets to the heart of what game thinking is. It's solving problems and

  • engaging audiences using a rubric that comes from games. Okay, so let's talk about some

  • of the main things that we've learned from it. How many of you in the audience recognize

  • some of the things up on the board right now? Any of them? Okay. These are some of the top

  • selling games of the last five years. And they include--I'm not kidding--being a male

  • technician, diapering a baby, being a waitress, running a farm, being an air traffic controller,

  • which as many of you know is the highest suicide, highest stress position in the entire world.

  • I mean, if you would come into a game publisher five years ago and said, "I've got a great

  • idea. We're going to make a game where you play an air traffic controller, planes could

  • crash, what do you think? Sound good," right? You'll be laughed out of the room. That doesn't

  • sound like fun. That doesn't sound like fun at all. It highlights a really important conclusion

  • which is fun and the theme of the thing which are fun are actually not connected. If you've

  • been in a casino before and you've seen the Oprah Winfrey branded slot machine and the

  • Harley Davidson branded slot machine and the neutral slot machine, you all as science-oriented

  • people are aware, the slot machine acts on your brain the exact same way. Once you choose

  • to sit down in front of that slot machine, same behavior in your brain, same engagement

  • loop, same reaction. "Ding, ding, ding, oh, yeah, ding, ding, ding," right? It's the same

  • thing. It doesn't matter which brand is on the front of the slot machine. Theme is a

  • lure to bring people in to an engaging experience. It's a lure. And that has important implications.

  • That means, if air traffic control can be fun my friends, anything can be fun, right?

  • It's an opportunity. It means we can turn government. we can make government fun. We

  • can make getting fit fun. We can make searching fun or more fun. All right, so it, of course,

  • begs the question, you know, "What is fun?" So, I put some words in a word generator.

  • And I put them up on the board. Some--the words on the top are things which normally

  • people associate with fun and the words on the bottom are words that normally people

  • associate with work. And what's interesting is, you know, there's a big bright line drawn

  • between the two of them in my childhood. You know, I grew up in a house in which my mom

  • said, "Eat your vegetables and then you can have dessert," right? "Eat your vegetables

  • and then you can go out to play." There is a theme around vegetables. So, these things

  • though are arbitrary distinctions. They're arbitrary. These are lines drawn by people

  • in the air that say, "This is fun and this is not." If you're a parent in the room, if

  • I could deliver for you a piece of cake that had the same nutritive value as broccoli,

  • the exact same nutritive value as broccoli, can you honestly tell me that you would never

  • cave and give your kids broccoli cake, right? The point is these lines are arbitrary. They--them--they're

  • meaningless. We can make anything fun or anything work depending on its design. And that's a

  • very important kind of like switch that's being flipped in people's heads and they're

  • going, "Oh, okay." So, I can make anything engaging--and you really can--which brings

  • you a question my favorite allegory in this whole story. So I played a game that many

  • of you might recognize called, "Where in the World is Carmen Sandiego?" If you played it,

  • put your hand up. If you played it on the Apple II, keep your hand up. Okay, so now

  • I know how old you are, so. Okay, so it's the '80s and I'm playing "Where in the World

  • is Carmen Sandiego?" on my Apple II, green screen, lots of fun. Would it surprise you

  • to know that that was the last really successful educational game in history? Would it surprise

  • you to know that since then 1,200 startups, $4 billion have been spent on "edutainment"

  • software and not a single hit like, "Where in the World is Carmen Sandiego?" And that's

  • it's a completely captive market. There are 60 million children. It is a captive market.

  • What's happened? Here's what went wrong. Parents and teachers got involved in the design of

  • the games. And as soon as they did, kids could smell that shit a mile away. That's not fun,

  • that's work, right? In parallel, incidentally, Civilization and Sim City have taught hundreds

  • of millions of people basic, basic tenants of the human historical arch and how cities

  • function in civics, basics, completely unintentionally. Sid nor--neither Sid nor Will will tell you

  • they were on a pedantic pedestal trying to teach people with those games. They simply

  • chose that as the framework for a game, a setting for a game that they thought compelling.

  • They thought the real world would be more compelling than a fantasy world. And it turns

  • out that that's true. Non-fiction has a big advantage over fiction and gamification is,

  • think of it as, non-fiction gaming. It's gaming with your real friends and your real money

  • and your real stuff in the real world. It's non-fiction gaming. So, it, of course, going

  • back to Mary Poppins, there's a famous song in Mary Poppins called "The Spoonful of Sugar,"

  • and the premise of that song is, "If I make the medicine sweet enough, you won't know

  • that its medicine and you'll take it," right? Creating the objective, which is, of course,

  • is a good analogy. If any of you are marker--marketers in the room, a word that marketers sometimes

  • use to describe that phenomenon is loyalty program, right? Loyalty programs, let's just

  • do a simple working definition, are intended to get a user to take an action in your favor

  • when all competing options are mostly equal, right? Mostly equal. When things are really

  • unequal, loyalty programs are not that effective. But when their mostly equal, loyalty programs

  • have the effect of getting people to take a choice in your favor. Okay, so here's a

  • brief history of loyalty programs throughout history, 19th century, you go down to a local

  • mercantile in Boston and you're wearing heavy woolens and you haven't showered in a while

  • and you're like, "I need 10 pounds of sugar." And the merchant is like, "Aarr, you get a

  • pound for free." I don't know why it's a pirate merchant. I'm just--okay, because all the

  • people in the 19th century to me are pirates. It's like, "Aarr, pound of sugar." Okay, so

  • buy 10 get 1 free. That turns out to be a really sticky mean, right? We're still doing

  • buy 10 get 1 free as this sort of dominant model for loyalty programs. I don't know why.

  • I've asked lots of researchers, if any of you are interested in doing a PhD on buy 10

  • get 1 free, let me know. I think I can find you funding. It's like we got figure this

  • out, we don't know why. Okay, that stays about the same until the 1930s, when a company called

  • S&H launches their Green Stamps program. It was very simple. Instead of buying 10 and

  • get 1 free, you went to participating merchants, they gave you these little green stamps which

  • you licked and stuck into a book and you save them up and when you had enough, you went

  • to the S&H store or to the catalogue and you redeem them for stuff. The brilliant thing

  • about the S&H Green Stamps program was it completely, by creating a virtual currency,

  • it completely broke the users ability to keep track of a redemption rate, right? It used

  • to be 10 to 1. I buy 10 pounds of sugar, I get one for free. Now, I have no idea how

  • much I'm earning in virtual currency as expressed in redemption, right, because it was actually

  • totally variable. S&H knew what every green stamp was "worth" to them but the end user

  • couldn't keep track of it. They had no idea. Is 10 green stamps the same, you know, is

  • 10 green stamps for a T-shirt the same as 60 green stamps for a transistor radio? It's

  • almost impossible to figure that. It turns out virtual currency is very powerful that

  • way. Okay, that's today's dominant model until 1981 when American Airlines launches AAdvantage

  • and a week later TWA and the United launched their programs, which turns out to be a good

  • metaphor for that whole industry. And what American figured out, and what TWA and United

  • aped, is that actually, it's not about rewards at all. It's about status. Status is what

  • drives loyalty. And if any of you tried to redeem your frequent flier program points

  • this summer for a trip to Europe, you'll know that redemption is not the core value proposition

  • of a frequent flier program, or for that matter, a loyalty program. And that's today's dominant

  • model until just a few years ago in which loyalty programs emerged like Foursquare in

  • which you cannot redeem for anything in the real world. There's not even the notional

  • concept of redemption, right? They just dispensed with it altogether. Let's be super clear.

  • I want us to be super clear on this. You cannot extract one dollar from FarmVille. There is

  • not a T-shirt, a hat, a badge in the real world you can get for your FarmVille credits.

  • Not a goddamn thing. In fact, it's all money in and no money out in FarmVille to the point

  • that when Zynga did that super successful campaign with 7-Eleven for the slushies, you

  • know, the "Get a Slurpee, get FarmVille credits?" It wasn't, "Get FarmVille credits for every

  • Slurpee," it wasn't, "Redeem your FarmVille credits for every Slurpee," right? It was

  • "Buy a Slurpee and get FarmVille credits." Let's be clear, no real world redemptions.

  • Money in, nothing comes out. It's brilliant, right? So, the corillary, which is probably

  • even more powerful, is that while the cost of an incremental unit of loyalty--let's think

  • of a customer making a choice of your product, a choice in favor of your product when all

  • things are being equal--the cost of delivering that incremental unit of loyalty is dropping

  • precipitously. It used to be 10 cents. It was 10 to 1. It was 10 cents. That number

  • is now closing in to zero as completely virtual loyalty programs start cropping up out of

  • the weeds. The other thing which has become very important is that the loyalty choices

  • now become public. Loyalty used to be a private decision, right? How did I convey to you that

  • I preferred KitchenAid mixers over Cuisinart mixers in the past? You had to be in my house

  • for starters, right? We had to go through this ridiculous dance where I somehow bring

  • up the subject of, you know, mixers to you. It's like, "Hey, do you like my mixer?" And

  • then we sit down and we have a whole conversation. I mean, books were written about word of mouth

  • marketing, conferences were held about word of mouth marketing. It was all bullshit. There

  • was no process to word of mouth marketing. No one ever understood how it worked. No one

  • still understands how it works. Zynga knows how it works, right? Now, there's a process

  • for word of mouth marketing. It's on the social graph. It's processized. It used to be random.

  • Now, it's structured. This is a humongous change in behavior. And it means that every

  • decision is public and whenever decision is public it means decisions that are not taken

  • aren't potentially negative. So if your product is not the one being specified or chosen in

  • the public sphere, that maybe a sort of lightweight demerit against your product. So it begs the

  • question my friends, what is status worth? How many of you know or recognize either of

  • the two people up on the board? Okay, we got a couple of people. So anyone want to call

  • out one of them? >> Christian Siriano and Tomorrow Rodriguez.

  • >> ZICHERMAN: Right. Okay, so these two people are both winners of fourth seasons of major

  • game shows on television, right? The gentleman on my left is Christian Siriano. He won the

  • fourth season of Project Runway. The woman on the right is the first winner of Deal or

  • No Deal ever. She won in the fourth season and she won $1 million. Okay, is $100,000

  • enough to launch a fashion line in New York City? It is not. Is $125,000, the price on

  • Top Chef enough to pull permits in the city of New York to start a restaurant? It is not.

  • What do these people played those games for? >> For public fame.

  • >> ZICHERMAN: They play for attention. They play for power. They play for status. They

  • don't play for cash. It turns out cash is a great incentive if you have a bunch of it

  • to throw around, right? It's also this weird 10 to 1 relationship comes up here, but let's

  • set that aside and that continues to be 10 to 1. The bottom line is if you don't have

  • a good status system to offer users in exchange for their behavior, you need to give them

  • cash. And the worse your status system is, the more cash you have to give them. That's

  • basically the relationship of these things. And so at the heart of all this, we talk about

  • this in Game-Based Marketing, the book. We talk about this a lot. This is called the

  • gamification loop and at the heart of it is a point system. And around that point system

  • are a whole bunch of what we call game mechanics. Points, badges, levels, rewards, challenges,

  • leader boards, things that can be used to engage users based on a point system. Points

  • systems are super important, right? We use them in real life. Money is an example of

  • a good point system. But these things around the point system are incredibly important

  • because often, it's hard to communicate to somebody exactly how many points you have.

  • Like, it's really hard for me in conversation to tell you, or how much money I have in the

  • bank. "I have $N in the bank," right? So instead of doing that, I buy a whole bunch of stuff

  • which tells you how much money I have in the bank, right? It signals to you through a series

  • of ab--through a series of status choices, I signal to you how big my point balance is.

  • Signaling is an important part of this kind of interaction, right? It's not always about

  • the points, sometimes it's about the signals for the points. So some other examples of

  • things that you may have seen called meta-games, things like structured exchanges, gifting,

  • poking or flirting, questing and raids, these are groups of game mechanics put together

  • into one sort of unified experiences. These are other things that we use to create user

  • engagement, to create desired behavior with users in games. And they, you know, some of

  • them are fairly familiar. I want to share with you a little quote. If you don't know

  • Kiva, Kiva is one of the leading non-profit, you know, social service startups in the world.

  • They do micro-lending for important causes. So we interviewed last weekend in TechCrunch,

  • the founder of Kiva, Premal Shah, said, "Our biggest competitor is actually Zynga." Consider

  • the implication of that, right? He runs a non-profit. He runs a large scale non-profit.

  • He views his competition as Zynga. What is he saying? He's saying that increasingly,