For Badgeville, Gamification Is Big Business

Badgeville, the gamification technology startup, is on track to book as much as $10 million in sales for 2011, its first full year in business, according to CEO Kris Duggan.
The Menlo Park, California-based company, which sells a software platform that allows companies to easily incorporate social and gaming mechanics into their websites, has seen “explosive growth” since its September 2010 launch, CEO Kris Duggan told me in a recent interview. Badgeville, which has taken on $2.8 million in venture capital, is on track to reach profitability with its own revenue and has no plans to raise more outside funds, he said. Badgeville has 25 employees, and plans to add 10 more people to its staff in the next 30 days.
The company has attracted a customer base of 60 clients across a broad swath of industries — from retail website Bluefly, which uses Badgveille to create shopping incentives, to accounting and consulting stalwart Deloitte and Touche, which uses Badgeville widgets internally to drive employee performance. Badgeville is run as a software-as-a-service offering that typically starts at $2000 per month. Based on its current growth projections, the company expects to book between $5 million to $10 million in sales for 2011, Duggan said.
While Rajat Paharia, the founder of gamification startup Bunchball, recently told me that Bunchball’s six-year history gives it an edge over newcomers in the space, Duggan claims that being the new kid on the block is an asset. “A lot of first generation gamification startups require a good deal of software development on the client side,” Duggan said. “We’ve built this over the last year with modern approaches. We were focused on having a platform that can be easily configured without a lot of customization work.” Badgeville’s backend technologies were built using Ruby on Rails on MongoDB, he said, and the company has hosted the majority of its content in the cloud with Engine Yard and Amazon’s EC2.
“I like to say we’ve been able to build something that is the Goldilocks of the gamification market,” he said. “Not too customized, and not too do-it-yourself.”
Badgeville on Tuesday rolled out a new “Dynamic Game Engine” platform that allows brands to specify what behavior they want to reward– such as purchases, activity within a certain product category– and configure customized rewards for users who engage in those behaviors. Also on Tuesday the company launched a new widget studio to let brands add more highly customizable social and gaming elements to their sites.
Badgeville’s growth and near-profitable operations has attracted acquisition offers from larger software players, Duggan said. For the time being, he said the company is turning away M&A suitors to stay heads-down in growth mode. “We have not been at all interested in any inbound [offers to buy the company.] Our goal is to build a very big company, with thousands of customers.”