Not long after being laid off in June 2010 from his job at social news website Digg, Brian Wong was on a long-haul flight passing through Southeast Asia when he had his great idea. He looked around and was struck by how many people were enjoying themselves with games on their mobile phones or tablets. It was no new insight to recognize that mobile gaming could be monetized, but the problem was the current state of mobile advertising was, as he describes it, “in a state of absolute disrepair.”
Mobile ads were typically tiny, in-your-face reproductions of desktop banner versions. “It was annoying and just really counterproductive,” he says. Wong’s trick is to capitalize on what he calls “moments”—those times where players are enjoying accomplishing something in a game.
“That’s when I was like, that’s really exciting and there’s already millions of people playing these things, getting these moments. And no one’s doing anything with these moments. What if we could reward people in these moments? What if we could make the most out of the fact that you’re happy and actually augment that happiness by bringing brands in to reward you? Then it hit me that this shit was going to blow up!”
Such was the extemporaneous beginning of Kiip (pronounced “keep”), a little startup headed by a Canadian whiz kid.
Wong is the kind of young guy who’s so smart and self-confident, he makes you say “huh.” Not huh with a question mark. Just huh. Along with co-founders Amadeus Demarzi and Courtney Guertin, at 21 he’s running a successful business that integrates rewards into mobile games. To start he got $300,000 from True Ventures and some angel investors. Then in April 2011 he got another $4 million from Hummer Winblad and True Ventures, followed by $11 million in a second round in July 2012, led by Canadian VC Relay Ventures.
It’s perhaps what you’d expect from a kid who skipped four grades, two in elementary and two in high school, and graduated from the University of British Columbia four years early at 18.
And yet Wong, born and raised in Vancouver, still manages to project a bit of the down-for-whatever slacker vibe more commonly associated with whatever generation came after yours. He likes to go into VC pitches “completely unprepared,” for example. “My superstition is that if I over-prepare for a meeting I usually don’t do well in them,” he says. “I’m a very improvisational type of guy. I fly by the seat of my pants—I’m just really good at that. In many ways being younger didn’t phase me at all, mainly because I had no other choice. When you have no job and you have nothing to lose it’s pretty easy to walk into these things and be like, whatever.”
How Kiip works for the end user is simple: people playing mobile games are offered tangible rewards or virtual currency at random times for their virtual accomplishments. The business model is also relatively straightforward: the brands fund the rewards and Kiip shares revenue with the game or app’s publisher or developer as incentive for the latter to integrate Kiip. The startup has a variety of notable companies on board, including 1-800-Flowers.com, American Apparel, Procter & Gamble and Sony Music. It works with about 30 brands in all.
One of Kiip’s first advertisers was new snack food company Popchips, which makes a kind of potato chip that is neither fried nor baked. Says Brian Pope, chief marketing officer, “We were interested right away in the idea of reaching that mobile consumer, that gaming consumer, in the middle of an experience that they were passionate about. It was just one of a number of ways that we’ve tried to align the brand and introduce it within a lifestyle moment. So we right away recognized the power of what they were building and decided we’d run a test and see how it worked.”
So far, so good, apparently. While Pope declined to reveal the exact marketing spend and put it under six figures, he says the campaign, which has been running periodically since the summer of 2011, is accomplishing the company’s goal of building brand awareness. “The usual way that you look at this is, OK, you reached X number of people and this percentage of them engaged and it’s all very dry statistical information. And we look at that just like any brand does and those metrics have been good, but where you really find that you’re onto something special is when you look at the conversations that are happening outside of the game on Twitter and on other forms of social media. And you can watch it as these things are happening. You can see the conversations that people are having.”
Where it ultimately counts, it’s working for Kiip as well. Wong describes revenues as in the high seven figures and says revenue growth is up 1,000% from 2011. He adds that Kiip is trying to “aggressively grow,” which is the reason for pursuing more capital. The team currently numbers 30 people spread out across the San Francisco headquarters, New York City, Los Angeles and Chicago, up from 10 staff at launch in April last year. In July the company also announced a customer-facing app called Kiipsake, which is a digital wallet consumers can use to store and redeem rewards earned from Kiip-enabled games and apps.
Brian Wong is a keynote speaker at Marketing’s upcoming Mobile Marketing Conference. For more information and tickets, visit the website.
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