How one company is cashing in on the virtual goods movement to make the social networking experience a little more personalized for its 45 million users.
As applications for the 2010 Inc. 500 | 5000 arrive, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. (For more information and to apply, go to http://www.inc.com/inc5000apply/2010/.) One that caught our eye was Palo Alto, California-based IMVU.
Customers who partake of IMVU's services are treated to top-notch perks – shopping sprees at the largest malls, VIP access to trendy night clubs, and even romantic gondola rides with a special someone along a Venetian canal. Don't get too jealous, though – all of this is happening virtually.
IMVU is an online social network that allows users from around the world to create customizable 3D avatars, then connect with one another in chat rooms that simulate virtual environments. The company is one of many that have cashed in on the virtual goods movement. IMVU boasts a catalog of over 3 million items that its 45 million users can purchase to customize their chat experience, from hair and clothing for their avatars, to furniture and vehicles for their virtual spaces.
"What we've learned is, nobody wants to look exactly like somebody else," says Cary Rosenzweig, who was brought in as IMVU's CEO in 2007 by the co-founders Will Harvey and Eric Ries, two notable tech entrepreneurs who both now serve on the board of directors. "They want to be completely unique."
The site has created a fully-functional economy for itself – after a customer registers for free, they can buy a number of credits that are used to obtain items from the catalog. However, the site also allows users to create their own items for purchase, and sell credits to other customers. Last year, IMVU earned over $22 million in revenue up from nearly $3 million in 2006, boasting growth of 656.8%.
Rosenzweig says he expects IMVU to continue its rapid growth and is currently hiring engineers to help add more features to the site, such as interactive bowling and chess games. The company just moved its 60 employees from a cramped single-floor office to a three-story building previously inhabited by another social networking site that grew with leaps and bounds: Facebook.
"We're part of a trend, that more and more people are interacting online, where social and entertainment are coming together," says Rosenzweig.
J.J. MCCORVEY is a reporter at Inc. magazine, where he covers a wide range of topics, including technology and business research. He has covered metro news for The Detroit News, and his work has been featured in Men's Fitness. @jmccorvey