Paul Birch on ‘gamification’

Tech investor Paul Birch, who co-founded Bebo with his brother and sister-in-law, reveals in a Q&A with why the future is all about 'gamification'.

Your entrepreneurial career spans more than a decade: what interests and excites you about media?

The thing that interests me is the cutting-edge internet. Gamification is the application of gaming mechanics – so the motivation that people have while they are playing a game. In the world of commerce, people are looking at, thinking about and applying game mechanics to get people to buy.

There’s no problem with making product these days. The problem boils down to selling it and marketing costs. Viral marketing was version one where you could get millions of members, which is what Facebook and Bebo have done.

Game mechanics and gamification you can apply to any industry and any person and make it work. It’s not necessarily easy to make it work because there is a fair bit of discovery and understanding about what exactly drives people and their activities.

The phrase has picked up some traction in 2010 with the gamification conference in San Francisco. I would say people are using it to get investment. Investors pick up on what’s hot as well as do the people who are looking to start businesses.

What are your investment projects in the pipeline?

This year, I am looking to do my own start-up. I’ve done investments in the last couple of years and it’s been fun, it’s been a change and I’ve learnt loads. But there is nothing like doing your own start-up.

One thing with a start-up is that it takes a lot of time, effort and attention. You have to find something that you’re really interested in. The hard part is finding something that you really want to do rather than just something to do to fill in the time.

It’s likely to be in the gamification/application arena because that’s where there is effectively a massive opportunity being created by all these people joining Facebook and all those getting iPads, iPhones and Android phones. There is now a lag. Users have a phone and they have apps but they haven’t got many apps.

Users are open to a lot more apps. They will pay attention when new ones come out and consider using them. It’s always easier to get someone to use a new something than to get them to migrate from A to B.

What investments did you make in 2010?

I invested in online accountancy with [former Skype chairman] Michael van Swaaij, which was obviously a highlight for me.

There is also a company called Onalytica. They are part of this trend of companies that look at what’s happening online, take all the debate off the internet (blogs, news sites, and so on) and then work out what is going to happen in the future based on what people are currently talking about. My brother, Michael Birch, and I invested £5 million.

Why did you invest in

It was a combination of the people and the opportunities. I’ve used these companies that do what Darren [Fell, Crunch managing director] does in the past and I always thought they were terrible when I used them. I thought it was a bad user experience and I thought there was an opportunity to do something new.

He was doing all the things that I thought people should be doing. It seemed like a good opportunity.

How is the technology fundraising market looking this year?

For those people that know what they’re doing it’s very good, for those people that don’t know what they’re doing it is probably, as ever, very hard. There are opportunities out there. The people that have the most insight tend to be the best connected and pick up on the best opportunities.

I’ve done a lot of investments but it takes time for them to play out. At this point I need to see what happens to those I’ve invested in.

I’m certainly very excited about the rate at which things are changing in the internet sector. The sector has got bigger and bigger. The fact the general public are all on Facebook means they are ready for the next phase.

Birch was ranked as one of Business XL magazine’s annual Power Top 50, which ranks identifies the leading movers and shakers among UK entrepreneurs and investors. See the rest of the list here.

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