REVIEW: Gamification Platform Tracks/Rewards Performance

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Youtopia has attracted thousands of users, generated close to $100K in sales, and raised $508K in their first round of financing.

Founded in August, 2011, Youtopia is a management and  engagement platform that uses gamification tools (points, badges, and leaderboards) to motivate and inspire learning, service, and other positive behaviors. Youtopia is used at schools, universities, fraternities & sororities, companies, professional associations, nonprofits, etc. The software makes it easy for administrators to assign, track, manage, and reward activities that benefit students, employees, volunteers, and the greater community.

PRODUCT/SERVICE: Youtopia provides a simple, easy-to-use dashboard for both participants and administrators. The participant’s dashboard displays assigned tasks, tasks completed, hours worked, and/or dollars raised. Participants earn digital badges and points which are displayed on a leaderboard and can be redeemed for rewards. The administrator’s dashboard includes challenges or activities, challenges or activities completed, point values, and badges.

VALUE PROPOSITION: Youtopia offers the following value propositions: administrators can easily track and verify the performance of participants in any organization regardless of size;  Youtopia’s gamification tools effectively motivate and create positive behaviors and outcomes; detailed reports measure the impact that any challenge or specific activity is having on participants, the organization, and the greater community; participants can receive recognition and share accomplishments and good deeds with their peers to create a friendly competition and sense of community; organizations can create badge systems to address specific needs including the mastery of key skills, acquisition of knowledge, and achievement of goals.

MARKET SIZE: There are approximately 56MM students in K-12, 20MM in universities, 650K active undergraduates and 9MM alumni in fraternities and sororities, 6MM companies, 90K professional associations, and 2MM non-profit and community-based organizations. 86% of schools incorporate community service activities into the school day and/or the curriculum. In 2010, 63MM adults donated 8 billion hours of service valued at 173 billion dollars. According to the Corporation for National Service and Community Service, virtually none of these hours were managed, tracked, shared, or recognized through a common system or platform.

REVENUE MODEL: Youtopia’s revenue model is a 3 tier system: Starter – Free for teachers to use in a single classroom, 50 users maximum, limited feature set; Pro – $10/month for teachers, up to 150 students, more robust feature set; Enterprise/Organizations – $1/month/users (K-12, universities, frats & sororities, companies, associations, etc.), complete feature set, designed for entire schools, chapters, and large organizations. Their top-down, bottoms-up sales approach has been used successfully by other educational technology startups. They will sell directly to schools which have a longer sales cycle and will continue to sell directly to teachers who sign up for free.  Youtopia will sell paid subscriptions to schools, ads to educational vendors, and corporate sponsorships. After establishing a network in the educational sector with schools, students, & parents, Youtopia will expand to corporations, non-profits, professional associations, and faith-based organizations.

MANAGEMENT TEAM: Simeon Schnapper, co-founder/CEO, is a serial entrepreneur and the founder of several companies in technology, biotech manufacturing, and nonprofits. His companies helped to develop McDonald’s first global intranet, green products which were distributed via Walmart, and sustainable business models for nonprofits. Brett Singer, co-founder/ COO, is a serial entrepreneur and formerly the owner of a design boutique and Senior Designer for the Oprah Winfrey Show. Demian Krentz, co-founder/Creative Director, created content for the Oprah Winfrey Show, The Dr. Oz Show, and numerous Fortune 500 clients. Jacqueline Edelberg, Director of Strategic Partnerships, is the co-author of “How to Walk to School: Blueprint for a Neighborhood School Renaissance” and spearheaded the dramatic turnaround of Nettelhorst School in Chicago.  She has been a consultant to numerous school districts, universities, and civic groups on how to galvanize communities and improve public education. Nick Antista, Senior VP of Education, is the co-founder of two technology companies and former principal of an elementary school. Bob Mallo, Strategic Advisor, served in multiple C-level roles for 35 years at Follett Corporation which is a multi-billion dollar company in the global education market.

COMPETITIVE ADVANTAGE: Youtopia has the following competitive advantages: 1. They are  the only company in the marketplace to offer the following services: gamification, badges, rewards, activity customization, activity verification, personal social resumes, complex user management, social media integration, OBI compliance, and detailed reports. 2. They have MOU’s (Memorandum of Understanding) in place with large institutions and major educational software companies as part of their partnership programs. Major competitors include: Badge Stack, Class Dojo, Noble Hour, UBoost, x2VOL, and Class Badges.

PROOF OF CONCEPT: Youtopia has attracted thousands of users and generated close to $100K in revenue.

CUSTOMERS/USERS: Currently, their platform is being used by administrators in 10 schools and separately by 150 teachers in their classrooms, 80 chapters of Alpha Phi Omega, 4 non-profits, and 3 companies in 13 states and 3 countries. Youtopia has approximately 8000 users who have created 400 groups, participated in 1300 activities, earned hundreds of thousands of points, and issued 2000 badges. In 2012, Youtopia generated $66K in revenue and, as of March 1, 2013, $30K in revenue with 24 customers. Revenues are driven by monthly and annual subscriptions. Revenue from ads, affiliates, and sponsorship will begin later in 2013. Youtopia projects the following number of users at the end of each quarter in 2013 respectively–8K, 50K, 98K, and 165K. By the end of 2015, they estimate 1.4MM users, 1300 schools, 50 frats and sororities, $9.3MM in revenue and EBITDA of $3.6MM. They expect to be cash flow positive in the first quarter of 2014 and profitable in 2015.

STRATEGIC PARTNERS: Youtopia has strategic partnerships with AdvancED Community, Alumni for Public Schools, Illini Club in Chicago, Mozilla, Pearson, Philadelphia Youth Network, and Public Profit.

FUNDING: Youtopia raised $508K in their first round of funding. Eighteen angel investors contributed between $5K and $157K. In addition, the company won a $150K grant in the Digital Media & Learning Competition which is sponsored by the Gates Foundation, MacArthur Foundation and Mozilla. The company is seeking to raise $1.2MM in the second quarter of 2013 which will be used for hiring talent, marketing, and building out the platform.

SUMMARY: The market for badges has been gaining steam in the last couple years as evidenced by support from the Gates-MacArthur Foundation. In addition, on January 10, 2013, Mayor Rahm Immanuel announced the new “Summer of Learning” program which will include badges to acknowledge learning and skill development. Chicago will be the first city to use badges. Youtopia will need a catalyst to accelerate the growth of users and revenue in 2013. ❒

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