gdc: imvu lessons from the inside

Lessons from the Inside: Building and Optimizing a Virtual Goods Business

Lee ClancySVP Product Management & GM Direct RevenueIMVU Inc.

Agenda

• About IMVU

• Lessons from IMVU on Virtual Goods

• Q & A

An online community where members use 3D avatars to meet new people, chat, create and play

What’s IMVU?

Company Overview

• Founded in April, 2004

• Based in Palo Alto, CA

• 70 employees

• 3 institutional rounds

• $30M raised

0

10

20

30

40

45M• 3D avatars

• Virtual goods

• 45M registered users

• 10M uniques/month

• $30M+ revenue run rate

• Profitable

Cumulative Registrations

Business Snapshot

Registered Users

Cumulative Registrations

Attractive Demographics

70% Female

60% 18+ yrs old

60% USA

User-Generated Content

0.0

0.5

1.0

1.5

2.0

2.5

3.0M

06/04

12/04

06/05

12/05

06/06

12/06

06/07

12/07

06/08

12/08

06/09

3+ Million Virtual Items

Celebrating with Mohawks

Shameless Promotional Plug

We’re Hiring!www.imvu.com/jobs

Lessons from IMVU on Virtual Goods

IMVU > Life?

Virtual yes, but no less real…

…with complex social dynamics…

…and its own evolved economy

IMVU on Virtual Goods SuccessCurrency

Controls

Creative

Community

Creative

Decision Considerations

Which virtual goods are valuable to

users?

•Are you going to pick the hits?•What role do brands play?•How should they be priced & promoted?

How should they be built?

• In-house vs. outsourced vs. user-generated?•How often do you need new content?• If UGC, what creation tools do you support?

What properties do they have?

•Are they scarce or plentiful?•Do they last forever or expire?•Can they be traded, sold, stolen, or copied?

Currency

Decision Considerations

What is your currency strategy?

•Purchased currency vs. earned currency?•Do you need more than one currency?•Can users transfer or gift currency?

How should the economy be structured?

•Can you measure supply & demand?• If users cash out currency they earn?•Can third-parties sell your currency?

How can users pay for the currency?

• International & “unbanked” solutions?•How many payment methods are enough?•Do you have a one-click billing relationship?

Community

Decision Considerations

Which segments can

you serve?

•Do your goods appeal to multiple segments?•Are there venues for self-expression?•How well does each segment monetize?

How do virtual goods drive

stratification?

•What benefits do premium members get?•Value of goods for new vs. tenured users?

How can you facilitate

connection?

•What venues exist for users to self-organize?•Can you foster a gifting etiquette/culture?

Controls

Decision Considerations

How much customer support is

necessary?

•How to protect against virtual identity theft?•How much support for free vs. paid users?•When to moderate user-to-user issues?

What policies and policing

are necessary?

• If UGC, what goods are appropriate or not?• If UGC, what if a good is reclassified?•Legitimate flagging vs. griefer flagging?

How will fraud be managed?

• In-house vs. outsourced?•What percentage of orders require review?•How should secondary markets be managed?

IMVU on Virtual Goods SuccessCurrency

Controls

Creative

Community

Q & A