Startup TinySpark is announcing today that it’s building a sweepstakes platform that other companies can use to implement prize contests in all 50 states with sizable monetary rewards for mobile apps.

The startup is one of the first 10 companies to enroll in YouWeb founder Peter Relan’s new startup accelerator/incubator, Studio 9+. The accelerator recently described all of its initial class members of mobile-focused entrants. TinySpark wants to enable mobile app makers to offer sweepstakes rewards without the headache of organizing it. TinySpark will offload the task of doing the sweepstakes and setting up a large prize pool.

Peter Relan

Above: Peter Relan.

Image Credit: Studio 9+

Cofounders Ryan DeSanto and Austin Heap are offering a sweepstakes platform to all virtual-goods-based mobile apps. They’re following in the footsteps of big company’s like McDonald’s, which has had a lot of success with its McDonald’s Monopoly sweepstakes. Except TinySpark wants to level the playing field.

“We call it ‘McDonald’s Monopoly in a box,'” DeSanto said in an interview with GamesBeat. “Smaller companies can take advantage of sweepstakes, too.”

TinySpark’s plan is to offload the task of creating a sweepstakes and then pool resources to create a single prize fund that all of the customers can access. The initial prize for the sweepstakes is $20,000. If a customers win a sweepstakes in the contest of one of DeSanto’s customers, TinySpark pays the prize.

“We think we’re solving problems for a lot of people by helping app publishers influence user behavior with sweepstakes,” DeSanto said.

One of the big benefits is that the sweepstakes can get more people to sign up for an app or do something in it, reducing the need to advertise and lowering the overall cost of user acquisition — which is a huge problem in the mobile game market.

Real Networks is a competitor in that it created its own sweepstakes for its social casino games. So far, it has only been able to create sweepstakes that work in 31 states, but it does offer beefy rewards in the form of $100,000 a month. DeSanto said that most other companies don’t have the legal or technical resources to figure out how to implement a national sweepstakes program.

In order to maintain fairness and prevent fraud, states tightly regulate sweepstakes. DeSanto said that his company can offer various kinds of sweepstakes in all 50 states. He considers that to be a competitive advantage. Right now, sweepstakes like McDonald’s Monopoly are very distinct from gambling, which legally consists of chance, consideration, and a prize. Consideration is a bet of financial value. Sweepstakes have the chance and the prize, but no consideration, as it’s free to enter a sweepstakes contest.

DeSanto said that mobile app makers have tried to do this themselves, but they found it is complex. That’s where TinySpark steps in as a middleman. Tiny Spark will fully guarantee its sweepstakes, which will be offered in certain time frames and will be given away each time.

The company is going after any app that wants to incentivize or influence user behavior. An app maker may want people to sign up for a service. It can incentivize people to do that and reward them with a chance to win money in a sweepstakes.

The company has seven employees and it raised money in a first round of funding from Studio 9+. TinySpark is accepting companies into its private beta test now and it expects to launch its sweepstakes early next year.

Eros Resmini, an executive at Studio 9+, said he was impressed with DeSanto’s background and his ability to figure out how to legally do sweepstakes in all the states. He also liked the technical chops of co-founder Heap.

“Ryan has covered all of the bases,” Resmini said. “The network prize pool is important because the smaller companies don’t have the resource to do this.”

How TinySpark works

Above: How TinySpark works

Image Credit: TinySpark
Reblog this post [with Zemanta]