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Stanford Media X Event: IMVU’s Online Community

August 23, 2010

Brett Durrett (@bdurrett), VP Engineering at IMVU, gave an interesting presentation at a Stanford Media X virtual worlds event. IMVU achieves a $40MM annual run rate, primarily from the sale of virtual goods. Several virtual worlds entrepreneurs were in attendance at the event, which meant that Durrett’s talk received a lot of attention and interest.

IMVU is NOT a Virtual World

Durrett began the presentation by stating that IMVU is not a virtual world. Instead, they are an online community “where members use 3D avatars to meet new people, chat, create and have fun with their friends.” Many members of the early management team came from There.com (including Durrett) and their experience told them that an expansive “world” may not be the best solution.

Instead, the team considered connecting (with one another) the core function of the experience, so they built rooms and spaces where members can meet, connect and chat. IMVU has achieved large scale usage. At any time of the day, there’s usually 100,000 (or more) users logged into the system. And while there’s no single “world” connecting them all, a user can find and connect with any other user who’s online.

User Generated Content as Key Enabler

How has IMVU achieved their current run rate? User generated content. IMVU generates very little of the virtual goods for sale in their marketplace. Instead, it’s the community that creates the virtual goods for sale. Durrett noted that IMVU could have hired a staff of developers to create the 100,000+ pairs of womens’ shoes available in IMVU. But at the end of the day, they wouldn’t know if users liked those shoes.

And, that would have covered just shoes. The way to scale to the wide assortment of goods now available is to open up the creation to the users. With so many goods available, how do users find the items they want to purchase? Durrett noted that like any online retailer with a large inventory, intelligent tools need to be built, a la Amazon’s recommendation service. IMVU can recommend new items to you based on your past purchase patterns.

Competition Drives Engagement

Durrett described how IMVU creates daily contests based on pre-determined themes. Users dress up their avatars in the particular theme and then submit a snapshot (image) of their avatar. The community votes and the top avatars are displayed on a leader board.

To appear on the leader board, the reward is “virtual” (i.e. recognition, rather than cash, virtual credits, etc.). And yet, the contest creates an intense amount of interest and competition from the community – a great thing from IMVU. If members happened to admire a particular user’s outfit, they could purchase all the items in that outfit with a single click.

Expanding the Inventory

Expansion of virtual goods inventory will be a key driver to IMVU’s continued growth. They already make user generated music available (in MP3 form) and they recently launched games. For games in particular, it will be interesting to see if IMVU creates inventory items around game status and advancement, as is common in many of today’s social games (e.g. FarmVille).

While IMVU does not support user generated games today, that could be an interesting avenue of growth. They’d probably want to review and certify submitted games, to prevent malicious activity from occurring. In this manner, they could create a sort of iTunes App Store for games.

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