A Rush of Dopamine in the Head: Kiip Raises $11M to Monetize Achievements
Our feet are now firmly planted in the mobile revolution, and we still haven’t figured out how to make money from these damn phones. The obvious course of action – paying cold, hard cash in exchange for software – has but one barrier to entry, but it’s a doozy: People don’t want to part with their cash. That’s a broad generalization that isn’t true in every case -- there are a number of developers that have built a successful business around a paid mobile app -- but many apps are free because the developer doesn’t feel that they can charge for their software.
Developers have turned to advertising, that perennial revenue stream that has supported everything from radio to television. Unlike those established mediums, however, mobile advertising is relatively young and a number of companies are fighting to figure out that “secret sauce” that will make mobile ads work. One of those companies, Kiip, has raised an $11 million Series B funding round led by Relay Ventures, joined by Hummer Winblad and True Ventures.
Founded by Brian Wong, Courtney Guertin, and Amadeus Demarzi in September 2010, Kiip has expanded beyond an initial rollout of 10 games to over 400 games and apps and is now serving 100 million “moments of happiness," the company’s new-age term for a mashup of ad impressions and achievements. An exuberant 20-year old, Wong truly believes that Kiip is the best solution not only for developers, but also for retailers and users.
During our interview, Wong oscillates between explaining why Kiip works as a platform – "Brands get a chance to reach users in a natural state, users get something valuable because it's 'not an ad', and the developer benefits from the revenue stream and the fact that they are able to retain their users at a level that is higher than they would normally be able to,” – to calling out the ad industry as a whole, saying "You know you're in trouble as an industry when people will actively pay to remove you,” with an excited, borderline-bubbly demeanor.
This dualism came into play when we discussed the Build Fund, a $100,000 fund that Kiip set up for 20 indie developers to help get their app off the ground. "The initial fund came from revenues,” Wong assured me, saying that he refuses to cut into the money that Kiip has raised for projects like the Build Fund. When I asked if the company was planning on hosting another Fund, Wong said “We are planning on doing it again. It could be a year from now, it could be a week from now. I’m being kinda cage-y, because we haven’t decided on a date yet.”
Kiip – and Wong – may be exactly what’s needed to monetize mobile apps and games. The mobile platform is fundamentally different from television or print media, and advertisers have yet to catch up.
“You had an old technology, basically a billboard, that got smaller and smaller and more and more annoying,” Wong says of most mobile ads. By focusing on achievements and real-world rewards, Kiip capitalizes on users’ natural actions and displays its “moments of happiness” when users are the happiest. (“A rush of dopamine in the head,” as Wong describes it.)
The $11 million that Kiip has raised will help the company deliver more of shots of dopamine, as the funding will go directly towards expanding into a greater number of apps. Kiip has also moved to a new office in San Francisco to house its growing team, joining Twitter, Pinterest, and a slew of other companies that are moving into the city. Kiip also has offices in New York City, Chicago, and Los Angeles, placing it in several key startup hubs that offer plenty of opportunities for expansion.