Two years ago today, Seth Priebatsch, founder and chief executive of location-based gaming start-up SCVNGR, was giving a SXSW keynote to not one but multiple packed rooms of rapt listeners, eager to hear how weaving in video games into every day life could make for better living.
This year, Priebatsch spoke to a decidedly smaller — if still healthy-sized — crowd, explaining why his company has shifted its focus from gamification to the mobile payment focused LevelUp, the service it had originally launched just days before his 2011 keynote and which has now displaced SCVNGR as the company’s main focus.
“We asked what are the bigger challenges we want to address?” he said, reflecting on the decision.
Taking note that many critics complain that innovation has slowed in recent years, despite the Silicon Valley hype bubble, Priebatsch said many miss the essential issue.
“The problem isn’t that innovation has halted, it’s that innovation has only scaled linearly while problems are growing exponentially with population,” he said.
Identifying this led him to refocus the company on improving the core payment infrastructure, which he said had a legacy of being slow, burdened by fees and friction, and discouraging to new entrants.
More importantly to him, however, he said that payments were one of four major infrastructures that required an overhaul in order to help scale innovation’s impact on society, the other areas being:
And these problems are being tackled, he insisted. He pointed to Kenya, where mobile payments are now 31 percent of the country's GDP.
These versatile, mobile, instant payment systems cut out legacy middlemen and encourage new types of transactions, according to Priebatsch.
“When the ability to move money is instant and free, our economic infrastructure is ready to bridge the innovation gap,” he noted. He said that these types of innovation might not be as catchy or epic as sending a man to the moon, but defended their importance in terms of setting a path for innovation for the years to come.
“We want to leave the next generation with an innovation machine that allows them to tackle the problems they will face,” he said.