After a few months of putting Buddy Media together, we launched on Monday. The reaction has been awesome. I’ve received more than 50 requests for meetings from all the press we received. Many more people want to be my friend on Facebook. And I’ve received about a dozen LinkedIn connection requests (mostly from those who still wear jackets and ties to work, or at least not jeans).
And you know you’re on to something big when you the boo birds are out. Of the 22 comments on the TechCrunch story, the vast majority were negative. Bob Cobb put it best: “ugh, I cant stand the idea of virtual currency. The fact that they got 1.5 mil makes me sick.” I really hope Bob gets to a bathroom first. I wouldn’t want him to soil his clothes.
David Litsky writes, “Attempting to create your own economic ecosystem is tougher than people think. Look at the issues that face Second Life when their too good to be true bank went defunct. I agree with the other commenters that these virtual currencies are in effect a pyramid scam and will blow over with the social network pop.” Wow. A pyramid scheme. Really? Get in fast before this whole scheme topples over.
And Duncan Riley went out on a limb to point out, “When I think virtual currency I think Beenz and all the other Web 1.0 startups, not a vertical to be investing in.” Well, Duncan, luckily my investment group didn’t talk to you first. Phew. I’d be curious to know what vertical you would be investing in, and, if so, how much.
It became clear to me in reading all the comments in the blogosphere that the so-called tech elite (and not so elite) didn’t get what we are trying to do. Let me clarify a few things:
- We are NOT competing with PayPal. Just the opposite. I expect to work closely with PayPal. We will be introducing a peer-to-peer commerce system shortly. AceBuckers can sell items either for AceBucks or real currency. We will need a vendor to handle the real currency (PayPal or another provider).
- We will NOT compete with the Facebook wallet/micropayment system that is rumored to be on its way. This will actually help us out as per my first point.
- AceBucks is not Beenz, Flooz or [insert your internet currency here]. The business models are different. There is no comparison. Flooz and Beenz and the others were meant to replace credit cards. They sold online currency that could be used as a gift certificate at partner sites. For Flooz, that meant Barnes & Noble, J. Crew and many others. You can’t BUY AceBucks with real currency. You can’t exchange AceBucks for real currency. And most importantly, we will never hire Whoopi as our spokesperson.
So now that you understand that AceBucks is not PayPal, it’s not competing with PayPal or Facebook Wallet, and it’s not Flooz/Beenz reincarnated, you’re probably wondering: “OK, then what is AceBucks all about?”
AceBucks is a Facebook-wide loyalty program. The idea is simple — we reward account holders with actions that we like. These actions could be adding other apps, frequenting a partners’ store, sending an invite to a friend or playing a game of Griddle. Once you have earned AceBucks, it’s time to burn them. You can currently buy virtual goods in the AceBucks Mall. You can buy items via AceBuck auctions. You can send AceBucks to friends. Or you can hoard them and become one of the Rich Buckers. And starting in a few weeks you will be able to buy stuff from other members using your AceBucks.
So while AceBucks has been set up as a currency — you can earn ‘em and then burn ‘em — it really is a Facebook wide loyalty program that rewards users for doing stuff that we want them to do. The model works, unlike the failed models of Flooz and Beenz. Just ask American Express (AmEx Rewards), United Airlines (Mileage Plus) and others who use loyalty programs to drive their business. We just think it works much better in the Facebook environment and can’t wait to make it happen!
UPDATE: Here is Valley Wag’s reaction to this post. And here is Howard Lindzon’s explanation for why he invested in Buddy Media. It’s nice to know that someone reads this blog!
