There was a very interesting, and entertaining article in the November 2011 issue of the Harvard Business Review about what businesses can learn from organized crime. Without restating the article (I recommend you read it), I thought it would useful to apply the lessons for the benefit of social gaming companies.
Use the news to create opportunity
In the HBR article, they point out that criminal groups are very effective at scanning the macro-environment and capitalizing on what they find. Major events, both locally and globally, are great opportunities to build interest in a social game, create new monetization opportunities or improve virality. By tying into news events, a social game company can leverage all the interest and buzz around a current event. These events can range from a big sporting event (e.g., World Cup or Super Bowl) to a big news item (a lost drone, the European debt crisis) to a natural disaster (the Japanese tsunami). With a big positive event, there are opportunities to sell special limited edition virtual goods or creating particularly compelling wall posts and other virals. In the case of a disaster, social game companies in the past have increased engagement (and benefitted victims) by donating the proceeds of special virtual items. For some reason, this practice seems to have ebbed recently.
Outsource to specialists
Rather than doing everything internally as in the “Godfather” days, modern organized crime has created a loosely affiliated cooperative network (think freelance thugs or hackers). For social game companies, there is a great opportunity to move their user acquisition to agencies (such as TBG), to have contractors help analyze their data, to generate more revenue by using international publishers (such as Plinga and Pixonic), etc. Rather than find a team of several hundred, with (at least) some of them not being the best in the field, you can outsource multiple functions to great partners.
Cash isn’t the only incentive
Although criminal organizations pay well (or at least that is what I hear), one of their strongest recruiting tools is the thrill tied to their activities. While deploying a new content pack may not release as much testosterone as robbing a bank, by creating a challenging environment for your employees where they feel they belong goes a long way to retaining your top performers and attract others.
Exploit the long tail
Global criminals reap big profits by executing small operations repeatedly. Rather than trying to create the next Cityville, think about building an iOS app that can repeatedly reskinned (maybe capitalizing on a current event). Another option would be a niche Facebook title that can then be launched in territory after territory, social network after social network. The point is that rather than going for the huge win, look at creating a series of small successes that may be easier and in the long term more profitable.
Collaborate across borders
Think of Al-Qaeda and how it works with splinter groups across Asia and Africa. In the social gaming ecosystem, there are many opportunities to partner with other companies to increase global revenue. You can find a French, German or Chinese game company and generate revenue by licensing your game to them for their territory. Conversely, you can look to foreign companies to acquire content you can then publish in your home market to augment your product line-up (and generate more revenue and traffic). You can even partner with a competitor who may have a presence in a market that is not in your focus to bring your product there. Organized crime, and organized business, is littered with entities that compete in one region while cooperating in others.
As I mentioned, the underlying article in HBR is really eye-opening and provides a great framework for building a social game company. I hope some of the opportunities I highlighted above help social game companies build their business (without knee capping anyone).
The Business of Social Games and Casino 