Lesson 19, Topic 6
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UPG Team March 17, 2023
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Engagement is a critical attribute for exponential organizations (ExOs) as it allows them to attract, retain and mobilize a community around their shared purpose or massive transformative purpose (MTP). By using engagement techniques such as gamification, incentive prizes, and crypto economics, ExOs can keep stakeholders interested, involved and committed to their vision, which in turn creates a loyal customer base and a strong community.

Incentive prizes are a powerful tool to engage stakeholders and convert the crowd into a community. The XPRIZE Foundation is a well-known example of this engagement technique. Incentive prizes create a clear, measurable and objective goal, and offer a cash prize for the first team to reach that objective. The advantage of this type of competition is the ability to deliver huge leverage and efficiency, as the prizes only pay the winner after the feat has been clearly achieved. Incentive prizes are also tools that can be used by individuals, startups, medium and large corporations, even governments. But they are most powerful when they allow small teams or lone innovators to launch or transform industries.

One of the most important benefits of an incentive competition is the creation of an entire ecosystem of teams competing. Rather than backing only one team, incentive competitions have the ability to engage and inspire dozens, and sometimes thousands of teams to make an effort to achieve the goal desired. This competition can galvanize not only a single company but an entire industry, spurring it forward at an unprecedented pace.

The XPRIZE Foundation has launched over $300 million in prize purses ranging from $2 million to $100 million in size. However, the Foundation spun off a smaller platform called HeroX, allowing companies to create their own smaller challenges to solve local and global challenges. The HeroX platform enables the rapid design and launch of incentive competitions, ranging from $0 ‘Karma’ prizes to prizes in the 10’s and 100’s of thousands of dollars.

In the past, incentive competitions have been used to spur innovation in areas such as space exploration and aviation, but there are many other areas where they could be applied, including healthcare, education, climate change, and social justice. For example, the XPRIZE Foundation launched its largest prize ever in 2021, a $100 million purse for “gigaton carbon removal” funded by Elon Musk. The prize has spurred over 1,100 teams to enter the competition, and the winner is expected to develop innovative solutions to reduce greenhouse gas emissions and combat climate change.

Gamification is another engagement technique that ExOs use to create a sense of community and motivate stakeholders to take action towards the MTP. Gamification involves applying game design principles and mechanics to non-game contexts, such as work or education. By using gamification, ExOs can create a sense of competition, feedback, and achievement, which can increase engagement and motivation. Gamification can also be used to train employees, educate customers, and encourage social change.

Today, with the advent of Web3 technologies such as cryptocurrency and non-fungible tokens (NFTs), engagement has become even more powerful. Cryptoeconomics is the use of economic principles and cryptography to design decentralized systems, such as blockchain networks, that incentivize stakeholders to act in the best interest of the network. By using crypto economics, ExOs can create token economies that incentivize stakeholders to contribute to the growth and development of the network. This can include rewarding users for sharing content, providing feedback, or referring new users to the platform.

Engagement is a critical attribute for ExOs, and it involves using a range of techniques such as gamification, incentive prizes, and crypto economics to keep stakeholders interested, involved, and committed to the MTP. By leveraging these engagement techniques, ExOs can create a sense of ownership and belonging among their stakeholders, which can drive innovation, improve organizational performance, and foster a culture of collaboration and experimentation.

Moreover, engagement is not a one-time activity but a continuous process that requires constant attention and nurturing. ExOs need to create a dynamic ecosystem that encourages feedback, communication, and transparency, allowing stakeholders to feel heard, valued, and respected. This means providing opportunities for stakeholders to share their ideas, suggestions, and concerns, and incorporating their feedback into the decision-making process.

In addition, ExOs need to be flexible and adaptable to changing circumstances and evolving stakeholder needs. This means being open to experimenting with new engagement techniques, monitoring their effectiveness, and making adjustments as needed. It also means being responsive to stakeholder feedback and addressing their concerns in a timely and transparent manner.

Overall, engagement is a critical component of ExO success, and organizations that invest in building strong and meaningful relationships with their stakeholders are more likely to achieve their MTPs and create lasting value for all involved. By leveraging engagement techniques such as gamification, incentive prizes, and crypto economics, ExOs can create a dynamic and collaborative ecosystem that fosters innovation, drives growth, and delivers meaningful impact.

User engagement techniques, such as sweepstakes, coupons, and loyalty cards, have been around for centuries, but digital technologies have transformed their implementation and impact. Companies like Google, Airbnb, and Twitter leverage different engagement mechanisms to build and maintain their user base. Cryptocurrencies have brought about a revolution in engagement, creating new forms of speculation, gaming, and investing, promising to change engagement in ways we can’t yet imagine.

In an exponential organization (ExO), engagement serves up a triple dividend, keeping current members happy, converting the crowd into a community, and adding value to the product or service. Gamification is one of the most comprehensive and effective engagement techniques used by companies today, and the Octalysis framework is one of the best and most comprehensive gamification frameworks that incorporates human engagement dynamics.

As we move forward, gamification is emerging as the leading method of engagement. The Octalysis gamification framework has developed 166 separate techniques that can be implemented in any business situation. When combined with blockchains, everything is derived from blockchains. The book Metaverse by Matthew Ball mentions that 75% of young kids in the US play Roblox, which is an excellent case study for user engagement.

The Octalysis framework is a gamification framework that helps organizations understand the motivations and desires of their users or customers. The framework was created by Yu-kai Chou, a gamification expert and entrepreneur, who studied and analyzed the elements of human motivation and engagement in games and applied them to real-world situations.

The Octalysis framework is based on the concept that people are motivated by eight core drives that are classified into four categories: white hat, black hat, left brain, and right brain. These core drives are:

  1. White Hat: The core drives in this category are motivated by the desire to achieve a higher purpose or meaning. These drives are based on altruism, social good, and the desire to make a positive impact on the world. The core drives in this category are Epic Meaning & Calling, Development & Accomplishment, and Empowerment of Creativity & Feedback.
  2. Black Hat: The core drives in this category are motivated by the desire to win, gain, or avoid negative consequences. These drives are based on fear, greed, and the desire to avoid pain. The core drives in this category are Scarcity & Impatience, Fear & Avoidance, and Ownership & Possession.
  3. Left Brain: The core drives in this category are motivated by the desire for logic, analytics, and order. These drives are based on the need for structure, systems, and predictability. The core drives in this category are Status & Social Influence, Certainty & Avoidance of Uncertainty, and Mastery & Competence.
  4. Right Brain: The core drives in this category are motivated by the desire for creativity, self-expression, and freedom. These drives are based on emotions, aesthetics, and the need for novelty. The core drives in this category are Unpredictability & Curiosity, Expression & Feedback, and Social Influence & Relatedness.

The Octalysis framework helps organizations design engaging experiences that tap into one or more of these core drives. By identifying the core drives that motivate their users, organizations can create experiences that are more engaging, enjoyable, and rewarding.

The framework also includes a set of design principles that help organizations design effective engagement mechanisms. These principles are:

  1. Meaningful Choice: Users should be given meaningful choices that affect the outcome of their experience.
  2. Progression: Users should be able to track their progress and see how far they have come.
  3. Empowerment: Users should feel empowered to take action and make a difference.
  4. Social Influence: Users should be able to see and interact with other users to create a sense of community.
  5. Unpredictability: Users should be kept on their toes with unexpected events and surprises.
  6. Avoidance: Users should be able to avoid negative consequences and be rewarded for positive behavior.
  7. Feedback: Users should receive feedback on their actions and progress.
  8. Gamification: Users should be able to engage in activities that are fun and rewarding.

The Octalysis framework is a powerful tool for designing engaging experiences that motivate users and drive business success. By understanding the core drives that motivate their users and applying the design principles outlined in the framework, organizations can create experiences that are both fun and rewarding, while also driving user engagement and loyalty.

Engagement has evolved with the emergence of incentive prizes and crypto economics, which have become powerful tools for building communities and crowds. Incentive prizes such as XPRIZE have consistently resulted in 15 times the prize money being spent on R&D and product development, leading to innovations from unlikely sources. Crypto economics, which combine cryptography, computer networks, and game theory, incentivize communities with early adopter rewards and gamification, resulting in billion-dollar ecosystems. NFTs are a recent example of ExOs, with collections such as the FlyFish Club using membership NFTs to access events and perks. Engagement serves a quadruple dividend in an ExO, helping to keep current members happy, converting the crowd into a community, adding value to the product or service, and enabling monetization of engagement through loyal investors. The tools for engagement now include traditional methods, virtual methods, and Web3 methods such as cryptocurrencies, crypto wallets, NFTs, proprietary user design competitions, and employee/user collaborations.

Customer engagement is a critical aspect of any successful marketing strategy. It’s the foundation for building and maintaining strong relationships with customers, ensuring that they choose your brand over the competition, benefit from your products or services, and keep coming back for more. Customer engagement is not just about creating catchy slogans or celebrity endorsements anymore; it’s about connecting with your customers in an authentic, meaningful way, and providing them with compelling reasons to engage with your brand.

Thanks to social media and mobile phones, businesses and brands must now be always “on,” ready to engage with customers anywhere, anytime. The more your brand embodies its MTP (Massive Transformative Purpose), the easier it becomes to engage with customers in a meaningful way. However, customer engagement is not just about promoting your brand; it’s also about listening to your customers and understanding their needs, concerns, and preferences.

To increase customer engagement, businesses must use a variety of strategies that target the right audience and provide compelling reasons for customers to engage with the brand. These strategies may include offering exclusive discounts, creating engaging content, personalizing communication, and building a sense of community through social media platforms. The goal is to create a two-way conversation with customers that fosters trust, loyalty, and advocacy.

One of the key drivers of customer engagement is gamification. Gamification refers to the use of game mechanics, such as points, badges, and leaderboards, to make non-game activities more engaging and fun. By incorporating gamification elements into marketing campaigns, businesses can increase customer engagement and create a more immersive brand experience. However, gamification should not be used just for the sake of adding a game-like element to a campaign. Instead, it should be used strategically to support the overall marketing objectives and create a more enjoyable experience for customers.

Another important aspect of customer engagement is customer feedback. By listening to customer feedback and incorporating it into product development and marketing strategies, businesses can create more customer-centric solutions that meet the needs and expectations of their target audience. Customer feedback can also be used to improve customer service and create more personalized experiences for customers.

In addition to traditional marketing strategies, businesses can also use emerging technologies, such as Web3, to enhance customer engagement. Web3 is the next generation of the internet, which is based on blockchain technology and offers new opportunities for decentralized applications and services. By using Web3 technologies, businesses can create more engaging and interactive experiences for customers, such as tokenized loyalty programs, decentralized marketplaces, and social media platforms.

By now you should realise that customer engagement is the key to building strong relationships with customers and creating a loyal customer base. By using a variety of strategies, such as gamification, customer feedback, and emerging technologies like Web3, businesses can increase customer engagement and create more immersive and enjoyable brand experiences. Ultimately, businesses that prioritize customer engagement are more likely to succeed in today’s competitive marketplace.

The benefits of successful engagement include fast iteration, community and crowd binding, loyalty, ideation amplification, marketing leverage, play and learning enablement, and more. However, challenges of successful engagement include the need for specialized resources, potential for wrong implementation, time and effort waste, difficulty in implementing Web3, and the need for clear incentives. The future of engagement includes the application of gamification, incentive prizes, and crypto-economics to all areas of society, the use of NFTs as a tool for Exponential Organizations, and the management of large communities at scale.

These are some action steps to get started with engagement:

  1. Familiarize yourself with the octalysis framework
  2. Run a contest within your organization to identify the best engagement ideas
  3. Gamify the top two ideas
  4. Launch an incentive prize to attract and expand your community.

This concludes the module on external attributes of an Exponential Organization. In the next modules, we will explore the internal attributes of a successful ExO, which include Dashboards, Social Networks, and Interfaces.