The archive · Consumer Apps · Strategic decision · 2010–2011
Punchd's phone-loyalty-card bet ends in Google's July 2011 acquisition
Two Cal Poly students built a phone replacement for paper loyalty punch cards in an Android class; a year later Google acquired their 500 Startups company.
Punchd
What the business is
Punchd made a mobile loyalty-card service that replaced paper punch cards, connecting customers to their favorite shops, restaurants and venues.
How it started
Punchd hatched at Cal Poly San Luis Obispo in 2010 as a solution to a simple, familiar problem: how do you connect customers to their favorite shops, restaurants and venues? Reed Morse and Grantland Chew wanted a better answer to the loyalty punch card, and they built the first prototype in an Android Development class—a class that existed because Google had donated a bunch of Android phones to Cal Poly's computer science department.
What happened
The founders turned the prototype into a senior project and then into a business around the same idea. The team stayed small and worked out of 500 Startups in Mountain View, building a digital loyalty product for the shops, restaurants and venues whose customer relationships had run on paper.
How it ended up
On 2011-07-11 Punchd announced it had been acquired by Google, about a year after the company hatched. The team joined Google's Mountain View offices—just down the street from 500 Startups—to improve how businesses and customers interact.
Background
Punchd hatched at Cal Poly San Luis Obispo in 2010 as a solution to a simple, familiar problem: how do you connect customers to their favorite shops, restaurants and venues? Reed Morse and Grantland Chew wanted a better answer to the loyalty punch card, and built the first prototype in an Android Development class—a class that existed because Google had donated a bunch of Android phones to Cal Poly's computer science department.
The founders turned the prototype into a senior project and then into a business around the same idea. The team stayed small and worked out of 500 Startups in Mountain View, building a digital loyalty product for the shops, restaurants and venues whose customer relationships had run on paper.
On 2011-07-11 Punchd announced it had been acquired by Google, about a year after the company hatched. The team joined Google's Mountain View offices—just down the street from 500 Startups—to improve how businesses and customers interact, and the announcement drew 123 points and 25 comments on Hacker News that day.
What has to be true
- Punchd attacked a universal small-business pain—paper loyalty cards that get lost and cannot be measured—with something nearly every customer now carries.
- The Android class at Cal Poly, stocked with Google-donated phones, gave the founders a working prototype before they had a company, collapsing the distance from idea to product.
- The company stayed small and focused on one behavior—punching in at a favorite spot—which made the product easy to explain and easy for Google to absorb.
What can be applied
Build where the giants are already investing: the Android phones Google donated to Punchd's classroom made the product possible, and Google later bought the team building on its platform.
Aftermath
As of 2011-07-11 Punchd had just announced its acquisition by Google: the small team was joining Google's Mountain View offices to improve how businesses and customers interact, about a year after the company hatched at Cal Poly San Luis Obispo. Product scale, revenue and what happened to the loyalty service after the deal are not documented in this batch's sources.
Sources
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