The Big Question for 2011 - Will Gamification Change Social Media - Umair Haque - Harvard Business Review

It doesn't matter whether I'm talking to an investor, C-suiter, or an entrepreneur. Most of them — like most of the general public — answer the question, "What does social media mean to you?" with "It's stuff that helps you make 'friends, digitally!! Do you want to be my friend?"

"Sure" I usually reply. And then I say: "But thinking of social tools that way is a little bit like using a positronic brain multiplier from the 25th century to tie your shoelaces faster. Here's a more powerful, resonant — and disruptive — way to think about social media. At the end of the day, conceiving of it purely as tools to help people build larger quantities of less and less meaningful, potent, relevant "relationships" is to minimize its potential — and that might just be exactly what's holding you back. Think of the "social" in social media the way economists use the word: to represent society. The right function of "social" tools is to give yesterday's creaking, rusting institutions social — as in societal — significance. Social doesn't just mean friends — it means society."

The untapped capacity to create significance (and all the stuff that follows on from it — higher purpose, a sense of meaning, animating passion, intrinsic motivation) has never been more important: I'd gently suggest it's the wellspring of 21st century advantage. As I've discussed at length both here and in my book, The New Capitalist Manifesto, the real roots of this crisis are that 20th century institutions, whether banks, governments, or corporations, are becoming more and more useless to people, communities, and society. They're extracting wealth from them, instead of creating enduring, authentic value for them. And that game of musical chairs is this Great Stagnation writ large. Hence, if it's advantage in the age of austerity you seek, start with significance — not mere competitive superiority.

Let me make my case with a mini-case study. Lately, a new buzzword's swept the Valley and Alley by storm: gamification. That's the fancy term for the "funware" that lets you become a "mayor," unlock a "badge," or "check-in." So is it just (yawn) the flavor of the month, yet another navel-gazing fad — or something bigger?

I have a hunch that its promise could be bigger — but to get there, investors and entrepreneurs are going to have think more sharply about not just the what, but the why of games.

What is "gamification" from an economic perspective? As I've noted for several years now, the future of strategy is about learning to leverage markets, networks, and communities. The unwieldy term "gamification" is a case in points: it's about making markets in stuff, to unleash competitive dynamics. When I compete for a badge, medal, rank, or prize, I'm essentially bidding with my time, effort, and energy for a scarce resource. So think of gamification as making demand-side metamarkets: markets not just for products and services, but for prices, discounts, relationships, information, and more, that shape the value of products and services.

Hence, I'd see it like this: gamification is about putting the "market" back into marketing — and I suspect that it has the potential to unlock some pretty serious efficiency and productivity gains, especially in moribund, plodding ecosystems like food, retail, leisure, and especially banking, matching more ardent fans with higher-quality stuff (and thereby creating competitive pressure for yesterday's lumbering giants to shape up or ship out). Conversely, in areas where we're prone to biased, irrational decision-making — like deciding what to eat, buy, or wear — gamification can help turn them literally upside down, and bias us to make choices that are more authentically beneficial.

Of course, there are at least four big problems with gamification. The first is, as game designer Margaret Robinson has incisively pointed out, most gamification is just "pointsification." In my terms, there's no real market mechanism (in her terms, "hard, meaningful choices") at the heart of said game, just the accumulation of bits. The second problem is that too much gamification is about zero sum games: often, for me to win, you've got to lose. For example, many "gamified" sites simply offer a fixed number of badges, trophies, or other trinkets, to the first N participants that, for example, visit six different pages. That's because, third, many games are relying on — or worse, trying to create — artificial scarcity. A better approach is to find the bottleneck of natural scarcity in an ecosystem — and then gamify that, leveraging it. Instead of competing for a "fixed" number of "badges" (really just infinitely replicable bits), how about letting everyone that competing for one of the very few seats available at Momofuku Ko?

Those are the strategic problems that investors, C-suites, and media types of all stripes are focused on. But here's the most crucial and vital problem: Gamification is a means, but many or most are seeing it as an end. The real question is: what's the significance of your game? Does it have a meaningful point to it, or are you just using it as a clever tool to turn a quick buck? If it's the latter, think twice: the real disruptors are likely to be those who use gamification as a significance-amplifier, as a tool to help people achieve durable, tangible gains that are difficult, challenging, or downright impossible otherwise. Health Month is a nice example of a game with a larger point — one that's likely to create real value for real people, and that a smart pharma player might think about snapping up in a year or two's time.

Social media needs to enlarge its blinkered, myopic perspective on what the social really means. Trivialization, dehumanization, enslaved by the promise of a point, a badge, or a trophy, another friend, follower, or fan — that's the very definition of antisocial. That definition of "social" isn't: it promises to make tomorrow's organizations even more Kafkaesque, meaninglessly overquantified, hyperpoliticized, and tightly controlled than today's — and hence, of even littler use to society (hard as that may be to imagine).
Let me rephrase that.

Social is significance. The real promise of social tools is societal, not just relational; is significance, not just attention. You've got to get the first right before you tackle the second — and that means not just investing in "gamification," a Twitter account, or a Facebook group. It means thinking more carefully how to utilize those tools to get a tiny bit (or a heckuva lot) more significant, and starting to mean something in enduring terms. The deepest test of a 21st century business isn't just whether it glitters, but whether it can create thick value, that endures, benefits, and multiplies: whether it matters.