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Serious Play: The Business of Social Currency

Tue 17 May 2011

, David Armano, Harvard Business Review


Like many other platforms, Empire Avenue caters to human psychological factors and uses game techniques to reward participation and encourage a participant to willingly ‘give up’ what is truly valuable in business-data. So why would someone want to give up data? Social currency, blogs David Armano on hbr.org


I've just spent my first week on the social network/game called Empire Avenue, a new kind of site. If Twitter encourages us to tell the world what we are doing, and Foursquare tempts us to tell the world where we are doing it, then Empire Avenue asks us to determine what we think our friends and brands we like are worth. The network is partially a fantasy stock market which allows you to "buy and sell" profiles, whether they are profiles of friends or companies. It uses it's own currency system called ‘eaves.’

Human psychological factors
Empire Avenue highlights a pervasive trend that will likely influence the business world in the long term. Like many other platforms, including popular networks such as Facebook, Empire Avenue caters to human psychological factors and uses game techniques to reward participation and encourage a participant to willingly ‘give up’ what is truly valuable in business--data. So why would someone want to give up data? Facebook knows the answer to this question: social currency.

Increased prevalence
Social currency
is shared information that encourages further social encounters. It's not a new concept, but the social web increases its prevalence. In the web-based collaboration software platform called Rypple, a simple act of thanking someone on a team and using a badge as a way to show your gratitude is a form of social currency.

More connected
A platform called Badgeville promises to add virtual rewards to your digital media property through leaderboards and virtual ‘badges’ that act as reinforcements to reward certain behaviors and encourage others. As someone who has taken a deep dive in several social networks (I joined Twitter in 2007) and observes both the gaming and currency aspects of them, I do believe these dynamics will influence the business world as it becomes more connected. In this "social reward" economy, here are a few things you may want to consider as you manage teams and work to build the brand(s) of your organization.

Continue this blog on Harvard Business Review.

 



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