A Startup Finds That Metrics Don’t Create Good Apps

There’s a lot of talk these days about data-driven product development: the idea that if you’re making something for the web, you can test it, then tweak it based on the way users behave. If you figure out what gets users to like and share your product, then you can make it spread tremendously quickly and cheaply. However, at least one startup, Lolapps, is finding that data isn’t everything, and is now switching its strategy to rich social-game development, hiring experienced game designers and conducting user tests where the goal is maximizing fun.

Lolapps is among the most successful Facebook application creation companies, with 2 to 3 million daily active users. The San Francisco, Calif.-based company’s strategy since 2008 has been to allow users to create their own free virtual gifts and quizzes, leading to millions of total apps, with about 300,000 active today and a “mostly cash-flow positive” history. Lolapps actively measures user activity and incorporates that data into its tools to make them ever more viral, which gives it a formidable backbone to promote and test new apps without buying lots of advertising. So, following the market trend, it pivoted last year to produce its own social games in the model of runaway hit Zynga.

But the strategy shift didn’t really work — at least not enough to make a smallish startup with only $4 million in venture funding break out from the social gaming pack. (Moving past an expertise in distribution has also been problematic for the more richly funded Slide and RockYou.) A me-too Lolapps game called Garden Life and a branded Lolapps game for EA’s (s erts) Dante’s Inferno only have tens of thousands of daily active users.

Now Lolapps is doubling down on games. Last week, it released Critter Island, a new app intended to feel richer than the average Facebook game, with detailed and speedy on-screen animations. One of the most important aspects of Critter Island, said Lolapps co-founder and VP Product Kavin Stewart, is its sense of humor. As an example of silly game play, he said users can mock-drown their friends in the waters outside their islands (um, woo-hoo?).

As it’s transitioned, Lolapps has pushed aside session-optimization metrics in favor of user testing, where the key question is whether or not the tester is having fun. It brought on gaming legend John Romero as a consultant and hired Creative Director Brenda Brathwaite, another lauded game designer and developer who worked at Atari, Electronic Arts and most recently Slide.

Stewart and CEO Arjun Sethi told me Lolapps came to realize that distribution only goes so far. “When we first started making games we made mistakes,” Stewart said. “We thought it was a matter of simple math. But you need to be qualitative; you can’t just measure everything. Measurement is only good at finding local maxima.”

To me, Critter Island still looks pretty cutesy and not all that different from FarmVille. In response to my critique, the Lolapps guys said their next game — an unnamed app to be released later this year — will be an even bigger departure from existing Facebook games, with narrative play and a concept similar to “Snow White and the Seven Dwarves fighting evil in an amusement park in a dark forest,” as Stewart put it. Sethi said Lolapps is aspiring to match the success of Crowdstar, the bootstrapped social-game maker whose apps are “neck and neck with the leaders.”

Of course, Lolapps’ new game plan is just that. We’ll have to see if it succeeds. But I think the balance between quantitative and qualitative product design is a rich topic. I’d like to do more stories about the issue of data versus divine inspiration, so if you’re thinking about it, let me know.

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