XUQA Exclusive - Post 2.0 - An Interview With The Founder

College social networking site, Xuqa, recently launched a new version of the site which they have deemed as Xuqa 2.0. From their site, Xuqa 2.0 is:

“A giant online reality game played for fame and fortune between you, your friends, and 1,000,000 other players.”

For those of you that are really unfamiliar with the site, Xuqa combines all of the social networking basics (Friend list, customizable profiles, etc.) with a competitive element of gaining a certain level status (1 -10) based on your fame (profile views) and inter-site fortune (peanuts). I don’t really want to get caught in the explanation of it all, so if you would like more detail visit Xuqa itself, or Mashable has a decent description here.

What I was really interested in was digging into how the transition went from 1.0 to 2.0, and how 2.0 is performing compared to their old business model. Ali A Moiz, co-founder of Xuqa, was nice enough to sit down and answer some of my questions.

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How smooth was the transition into 2.0 for Xuqa’s users? Did you do a lot of informing of the changes before hand? Were there a lot of questions after the transition?

The transition could potentially have been disastrous, but it went through almost perfectly. We informed our “power” users several months ago on what was coming up, and as launch date neared, we spent a lot of time posting on the blogs and talking to people on the site one-on-one making them ready for the changes.Yes, there were questions after transition about the new UI, about Poker, about Xuqa’s vision, and about new ways to earn and spend Peanuts. Myself and the other founders spent several sleepless days just talking to people on xuqa through the forums and profiles after launch, and this one-on-one contact proved invaluable in reassuring the community and helping them transition to the new Xuqa.

What was the reaction from your users about 2.0 before the transition, compared to after?

Our community took a few days to adjust to the change, but since then the response has been completely overwhelming and very positive. This is the best overall response we have seen to our service in almost a year since we started. And the daily growth in users and pageviews is reflecting that enthusiasm.I am the in-house cynic on our team, and even I’m more excited about Xuqa than I have ever been. Heck, I even use it everyday now for non-business purposes.

How does new user registeration compare to the numbers before the transition? Traffic, i.e. page views, unique visits? What do you expect these numbers to do over the following months? What are the total membership numbers up to?

Growth has turned around from very being sluggish to almost 4000 new users / day. Daily pageviews are climbing to 2.5 million / day. Total membership: ~900,000. Overall, usage is increasing 30% per week since launch.

Are there any interesting new user activity trends you have noticed with 2.0? Anything you weren’t planning/expecting?

Things we weren’t expecting:
1. People would spend so much time and effort winning peanuts from others that we’d run into the capitalist problem of having the very rich, and very poor on Xuqa within 2 weeks. We had to end up creating programs to redistribute this “wealth”.
2. Customization is king. People love it way more than we had thought. Players want to customize everything they can touch. It creates a deep sense of ownership. And you never throw away what you own. Xuqa is the only place where they can customize everything they own - profiles, blogs and poker rooms.
3. Cheats/Hacks - We started noticing a lot of people putting a lot of time into trying to find ways to “game” the system to earn Peanuts, just like they do in MMORPGs like World of Warcraft. It made us focus on security. It was also very flattering that users thought it worth the enormous effort
4. Poker really does seem to be going mainstream. Girls are trying it out in a big way. It’s not a big sausage fest.

When do you expect affiliates to sign on? When do you expect Xuqa to be profitable?

We are launching our first peanut-based revenue systems next week. Users will be able to take online surveys, and sign up for affiliate offers, in exchange for Peanuts. Based on the number of active users we have and the amount of Peanuts they need everyday, we are confident of becoming profitable by next month. More than 5 million Peanuts are spent everyday, and at $1 = 1000 Peanuts, it is a very interesting revenue model that outperforms traditional advertising.

What is the next step for Xuqa?

To do more of the same. Build stuff for our core users. Give people more chances to become cleebrities - both on xuqa, and in real life. Make the game bigger, louder, and take it out into the real world. We’re putting together a college poker league that will start this semester. More than 30 universities are participating with 5000 students. Our models and bands competitions are already generating significant buzz on myspace and xuqa. The first xuqa models recently had their photoshoots with with our modelling agency in San Francisco.

Anything else about 2.0 that you would like to say/include?

It’s impossible to understand what’s making this game really tick unless you try it yourself. Go poker around, take it for a spin. And if you get to level 10, contact us and we’ll send you your $1000.

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If you happen to read my other blog about entrepreneurship, you will know I am a very big fan of young entrepreneurs, especially those in college. Which is why I will admit I have taken a special liking of following Xuqa from their original site Iventster.

At first look of its new numbers, it seems as if Xuqa has hit the nail on the head. However I do feel that the numbers are inflated a bit considering one of the only ways to gain more peanuts for the past couple weeks as been inviting new users. Delaying the launch of other peanut gaining features was a smart move, but I will be interested to see if those numbers drop dramatically once they do.

Xuqa has a very interesting business model, trying to stay away from traditional advertising. For those of you who haven’t done the math yet at $1 for 1000 peanuts, if people replenished what they spent everyday (5 million peanuts) that would be $5,000 daily (approx $150,000 monthly) in revenues. I personally don’t think people will replenish 100% of what they spend, but additional revenues will be made through affiliates. I know Xuqa doesn’t want to get into traditional advertising, but they do have a great venue for it through their poker rooms. Advertising within the poker rooms can gain very large CPM’s due to the time the ad is displayed, and the amount of attention that is directed towards a users computer screen while playing.

In addition, I think that Xuqa should be looking for other competitive features, besides poker, to implement. Poker is very popular, but not universal. Xuqa could really attract a wider user base with more competitive features. One idea, how about a FANLETE plugin where users could bet peanuts on college football and basketball games? ( sorry for the shameless promo but I really think it would be a hit). More competitive games/features leads to more peanuts being spent which ultimately leads to more revenue.

I also question how long students will be interested in the “online reality game” focus. What happens after someone reaches level 10? Will students really be interested in this beyond their senior year in college? Will users get tired of poker for peanuts? At the end of the day I think Xuqa is going to really need to focus on innovation and keeping the site fresh. This is much easier said then done.

Once again, thanks to Ali and best of luck to XUQA!

[tags]Social Networking, Social Network, Xuqa, Xuqa 2.0, College, Poker, Fanlete[/tags]