Novel, Backed by Vancouver VCs, Uses Gaming Tech to Make Business Simulations for Companies

What would “The Matrix” look like for businesses? Imagine a virtual-reality system that a company could jack its employees into in order to train them, evaluate their decision-making skills, or test out different management strategies. The technology might not be as far off as you think, thanks to a Seattle-area startup.

This is the story of one of the most intriguing and entertaining companies I’ve heard about in the past couple of years. Please excuse my lack of objectivity here. I’m talking mostly about the company’s core idea, not so much its business prospects (more on that later).

First, the news peg: Novel Inc., a 20-person startup based in Redmond, WA, has raised an undisclosed amount of first-round financing from McLean Capital and Nairbo Investments, a couple of venture capital firms in Vancouver, BC. The big idea behind the company is to apply massively multiplayer online (MMO) video-game techniques to create new kinds of games and business simulations for companies.

“I look at Novel as being a leader in the future of virtual reality,” says Brayden Olson, the company’s co-founder and CEO. “If we can help businesses with simulations, it can put us in position to be at the cutting edge of R&D.”

Here’s what that might look like. A company might evaluate its prospective employees’ leadership and teamwork skills by having a group of job candidates enter a game-like computer simulation where each person controls a virtual character. The simulation would present the group with various management problems, or other business situations. By watching how each person performs and interacts with others, the company could potentially learn more about them than it would in a run-of-the-mill interview. And if done right, it could be more time-efficient as well.

Brayden Olson

OK, this system doesn’t quite exist yet. But what makes it viable is that the technology and user interface are grounded in Novel’s multiplayer online video game engine—it probably won’t require a quantum leap in tech development. And that seems to be one of the company’s key competitive advantages.

The idea of using virtual reality and gaming technologies to create training exercises and work-related simulations is not new, of course. Organizations ranging from the military to Microsoft Research have pursued such projects for more than a decade. And Second Life, an example of a 3-D virtual world, has become a sleeper hit inside some big companies as an efficient tool for collaborating and teleconferencing. In recent years, computer interfaces have gotten faster and easier to use, graphics have become more dazzling and realistic, and online multiplayer games have taken off. Those factors all seem to be in Novel’s favor.

The company, previously known as Novel Interactive, officially formed at the beginning of 2009. Olson, its 22-year-old chief executive (see photo, above), is a recent graduate of Seattle University, and has gotten national press in BusinessWeek and a New York Times blog for winning a regional entrepreneurship award, and for competing in a business plan competition. The buzz around him is that … Next Page »

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6 responses to “Novel, Backed by Vancouver VCs, Uses Gaming Tech to Make Business Simulations for Companies”

  1. JBJ says:

    “We’ve never had the ability to do anything but kill stuff before [in MMOs].”

    Clearly somebody has never heard of Eve Online, which has enough going on that they hired an economist (back in 2007!)

  2. Jack says:

    There have been a couple of MMO based business communication companies. Its an amazing new avenue for communication and based on the amount of people sitting at home in their pajamas interacting socially for hours on end, seems like the logical next step for productivity in corporations. Novel’s templated scenario system makes alot of sense, I’ll be looking forward to seeing the finished product.

    On a side note, I’ve also evaluated proton media, second life enterprise etc… the most applicable to business I have seen so far is . They have been around for over 2 years, and their product is ready for use right now as a plugin in the web browser. They also seem to have nailed the avatar emotion, user experience, and all the user tools for communicating.

    Good to see more companies in this space, with remote workers, distance learning, and groups of hobbyists all over the world bringing their ideas to market virtual business is clearly the not too distant future.

  3. Eris says:

    I have to agree with JBJ…the author of this article seems to have not done his research. I don’t know about other virtual worlds, but Second Life not only has in-world businesses, but also its own economy with its own currency (Linden dollars). Residents (as players are called) can either purchase Lindens for real-world money or they can earn Lindens in-world.

    In fact, one woman became a millionaire (in real US$) just selling virtual real estate in SL!

  4. Gregory D. MELLOTT says:

    ‘ERROR Analysis’ may be its practical value. Virtual playing is much too slow a way to test principles for the most part; if one is even doing that when one lets humans interact relatively randomly, likely triggered by the graphics effects as much as anything else.

    One might consider our trade balance problem. There is little, if any, coherent response to it. Japan’s primary way to deal with foreign trade is to keep it to a minimum by the individual’s behavior. Their economy has struggled for a long time. The only way I can see to deal with such a problem and not generate isolationist behaviors is to have a ‘charitable’ tariff on products made in substandard conditions compared to what our laws allow. Even returning the funds generated to the communities impacted in a way that is acceptable by all parties, and tries to deal with the low wages, pollution, etc, while avoids having it fall into corrupting influences, like drugs and its trafficking, can let us compete and thus even project our standards abroad. That’s something worth analyzing to me. How much virtual reality debugging might be needed? I don’t know.