It started way back in the middle of the Internet boom years. I got onto eBay and started bidding on toasters (I collect antique toasters...!) As I bought and sold stuff, I collected positive ratings for my transaction behavior. As my positive ratings grew, I became more obsessed with responding quickly and often about my transactions. If I was buying, I would send payment as soon as possible or notify the seller that I had a delay. Likewise for selling, I would make sure I respond quickly and let the buyer know exactly when to expect the item. My rating was my reputation on eBay and it became one of the most important things I would build on the Internet, which was a trust rating that I cherished and allowed me to do things on eBay with other members that untrusted, poorly rated members would not.
Around the same time, Who Wants to Be a Millionaire? became one of the hottest TV shows. But something that ABC did that not many knew about was the fact that you could play real time along with the show and compete against others also playing via the Internet. I also started playing along with the show and the designers of the Web game did some really great things like allow you to accumulate points upon answering questions successfully and in a timely fashion (more points for faster answering). Players with the most points were put up on a leaderboard which you strived for. It was amazing how many points some people had accumulated. It made you really try to get to the top of the leaderboard and feel....famous for being the best. And the world knew you were the best because the leaderboard was visible to all.
Fast forward to 2004 where I discovered that HotOrNot.com had put up the ability to send virtual flowers to people you liked and wanted to meet via its meeting service. But they did something clever. If you received virtual flowers, they would appear next to your picture. It gave you a sense of superiority; I've got 10 roses! How many do you have? It made you feel great about yourself and showed the world that others thought you were hot enough to send flowers to.
And now, as a frequent contributor to Yelp, I find myself racing to be the first reviewer of a restaurant. When you are, you get a little icon that states you are a first reviewer and then on your profile, it shows how many first reviews you've made. Then, I started writing witty reviews instead of boring ones. Because readers can rate reviews on the basis of Useful (big deal) or Cool (yeah!) or Funny (even better!). For some reason, I sought to write better reviews in an attempt to get more Cool and Funny ratings! It's easy to write a Useful review, but not many can entertain or be noted for being "cool".
Fame and competition go hand in hand on the Internet. It's one of the best techniques for getting users continually engaged on your website. You hook them in by making them feel like they are the best at something, and let others know about it. If others can say your cool or the best, that's even better because now you have validation from the crowd. How much validation do we get in real life, even from the people we know and love? Often times - ZIP. But on the Internet, the millions of surfers can come by and tag you as cool, or see that you're the best at something.
Then since you know the crowd is watching, it makes you want to participate more, and it pushes you more to do better at whatever you're participating in. It draws you in and the reward is fame and notoriety whereas in the real world you may not have that chance.
It's easy to reward people with money. But it's costly and you need money first before you can give it away. When the reward is not money, sometimes it's more powerful at encouraging and reinforcing user engagement. I would argue that it is even more long lasting because if it's some contest you're in and you win, that's where it usually ends. There is no more beyond that. With a well crafted fame and competition scheme, you can engage users for a much longer time and at much lower cost.
Working with my startups on developing fame and competition systems tailored for their services is something I think about all the time.