Business Rx: Can they turn Social Ingot into a pot of gold?
For Paul Capriolo, Facebook is much more than a social Web site for keeping in touch with friends, co-workers and family members. The social networking giant, with 500 million active users, is part of the inspiration behind his company, Social Growth Technologies. Specifically, Capriolo saw a business opportunity in games on Facebook. Half of all Facebook users play some form of a game, and game-playing takes up 40 percent of their time on the site.
"We provide clients with the ability to turn virtual currency into revenue. Virtual currency includes everything from airline miles rewards, to credit card rewards programs, to programs attached to specific products or games.
"Virtual currency is a layer of abstraction that encourages spending -- many people spend their rewards points as soon as they get them. They don't treat it like their checking account. And they make conscious purchase decisions based on earning virtual currency. Maybe they'll stay at the Marriott because they'll get double points."
Capriolo's company is combining the reach of Facebook with the power of virtual currency and giving game developers a way to make money.
"Social Growth Technologies has created Social Ingot, a platform to provide ways for companies to make money from their virtual-currency-based applications.
"We provide game developers with methods to generate revenues through the incentivization of completing a marketing action such as taking part in surveys, clicking on links or watching videos. If a user participates in one of these actions, they receive more virtual currency to use in their game -- so more virtual "gold," "crystals" or "gems." In turn, our platform gives the game companies ways to make money off each action.
"We are already working with a few clients, but it is hard to introduce a new product into a very successful industry. It's difficult to convince someone your solution is better when what they are using seems to be working. We need to convince our customers that their current method actually is limiting their potential and turning users off. On the flip side, getting just a few clients means our technology is instantly reaching hundreds of millions of users every month. We have already signed several of the top platforms out there and reach applications whose user bases total more than 100 million users a month."
Asher Epstein, managing director, Dingman Center for Entrepreneurship at the University of Maryland's Robert H. Smith School of Business "The key for Social Growth Technologies is to get a high-volume transaction engine that is accepted industry-wide as a platform for monetization of virtual currencies. You need to focus on the large-name developers and the large distribution platforms so you can sell to the top and get lots of incremental transactions from the various customers of their clients.
"You also need to think about the end-to-end solution, which means not only offering this monetization to the game developers and platforms, but offering the tracking, reporting, analytics and management tools their customers will want to see to know they are maximizing their revenue opportunities by working with Social Growth Technologies.
"It's not good enough for Social Growth Technologies to get the best virtualization monetization tools for the end consumer. The tracking and integration is critical as well."
"Our plans are to continue to bolster our current solutions while approaching top platforms and developers in an effort to grow our client base. We are also beginning to implement new features that our clients have requested to make it easier for them to ramp up with us, implement our technology or understand their performance with our platform through metrics and analytics in a more succinct way. We have some great tools and we want to sell what we have."