As Badgeville Homes In On Gamification For Large Enterprises, It Launches A New Behavior Lab

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Gamification — the idea of adding gameplay elements into services to get people to interact more with them — has been one of the more buzzy features in the last few years of social media services, but it’s also been one of the more problematic. Last year, Gartner estimated that some 80% of apps with gamification incorporated into them are liable to fail in their purpose. And if you look at companies like Gowalla and Foursquare, you can see that consumer apps that incorporate these have had mixed success.

In that context, today, Badgeville, a $40-million backed startup that has developed a platform for third parties to incorporate gamification elements, is getting much more serious about how it positions its product, and who might be the most receptive audience for it. Today the company is launching a “Behaviour Lab” aimed at enterprises and their systems integrators to help test out gamification systems and put more research and development into how to improve them more in the future.

The new lab getting launched today is a mark of how Badgeville has been sharpening its focus under Comee, who joined the company four months ago with a specific intent to grow the company’s large enterprise business.

“We are going hard after the enterprise,” he told TechCrunch. In Badgeville’s defense, Comee notes that the company does “significantly better” than Gartner’s 80% failure estimation, “but this is still a nascent space, so part of that involves educating our customers, helping them figure out the best behavior for engagement.” He says that Badgeville has already seen some strong success in working with large enterprises directly and also via systems integrators Cap Gemini, PwC and Accenture. Current customers include American Express, Oracle and Universal Music.

That shift to enterprise customers has also meant a rebalancing of another kind at the company. We had heard, now confirmed, that Badgeville has laid off employees, 13 to be exact. “Yes, I took 13 people out of the business,” CEO Ken Comee told TechCrunch, “but we’ve also hired over 20 in replacement.” He says the company was “overstaffed” with sales people who weren’t performing, “and I’ve put those resources back into development, and services and support, as well as a different breed of salesperson who is very comfortable selling into large enterprises.”

It’s a widening of the funnel for Badgeville, which first debuted at TC Disrupt in 2010 (and then won the audience choice award) with a plan  to become the gamification layer for the web — giving  consumer sites the ability to add incentives like badges to get people to engage more.

By expanding its business to serve not just consumer sites but also enterprises, Badgeville is positioning itself further as a platform for gamification services. This also raises the question of what may be next for the company. Comee notes that Badgeville has several patent applications in progress and refers to Salesforce when he talks about how a cloud-based company based around a single focus can evolve by working with third parties to court business users.

For now, he says the company is not planning to acquire or otherwise move into offering actual applications incorporating gamification: for example, for now, AmEx’s travel expense applications that use Badgeville’s technology will not compete against anything from Badgeville itself.

Rather, Comee believes there is still a lot of business to be gained in what Badgeville is pursuing today. We’re faced, he says, with an older workforce who’s retiring, and the a new workforce weaned on the internet replacing them. The big question, he says, is “how do you get them more engaged? By 2020, 70% of the workforce will be Gen X’ers who are gamers by nature, who care about their online reputations, and who like to collaborate. Organizations will have to address all of that to keep their employees motivated.”