Rajat Paharia is co-founder and chief product officer of gamification leader Bunchball. Rajat holds a masters in computer science from Stanford University and a bachelor’s from the University of California, Berkeley. Prior to Bunchball he worked at IDEO, Philips Consumer Electronics, IBM Research, and ViewStar. In this interview he talks in detail about Bunchball’s gamification platform and how it helps businesses motivate employees and customers to drive better results.
Sramana Mitra: Rajat, let’s start with some introduction for our audience. Talk about your background and what you have been up to, and also introduce Bunchball to our audience.
Rajat Paharia: I am the founder and chief product officer at Bunchball. My background is in engineering, design, and computer science. I spent several years working as a software engineer at various companies around Silicon Valley, Texas, and the UK. Then I came back to do graduate training in computer science, with a focus on human–computer interaction. While in grad school, I met a man called David Kelley, who is the founder of a company called IDEO. After graduation I worked for IDEO for four years, doing work in a business unit called software experience design, where we designed strategy work for companies like AT&T, Boeing, McDonald’s, and numerous others. I left there in 2005 and started Bunchball.
The history of this company has been “right idea, but too early to market it.” In 2005, Bunchball started as a social gaming company – two years before Facebook launched their platform or anybody else had anything to build on. It was interesting, because in 2005 it was very easy to play games online with random strangers or by yourself, but playing with friends and family was really hard. That was a huge opportunity – something that got lost in this transition of gaming into the online world, because in the real world you play with your friends and family. We essentially built a social gaming platform that could be layered on top of any existing social network and would give people something to do with each other. We were out there selling it to Facebook, MySpace, Hi5, etc. and nobody was buying it. Nobody believed that gaming was going to be a killer app on top of their network. In the process of building that platform, we were looking for ways to drive stickiness and raise attention around our gaming products and came across an Electronic Arts casual gaming site. Pre-Facebook, it was one of the stickiest sites on the Internet. We noticed they had the same game content that other people had, but their site was 20 times stickier than anybody else’s.
We realized after analyzing it that it was based on all these gamification mechanics they had integrated that tied all these individual game experiences together with persistent statistics – things like points that you can earn in every individual game, which you can then take and spend outside of the game, an avatar that follows you from game to game, badges or trophies you can unlock by getting certain milestones, etc. We were saying, “If these guys are doing so well, why isn’t every gaming company doing that well and upgrade this onto our platform?”And we did. And we started it to motivate non-gaming behavior, to try and motivate people to write reviews and share with their friends. And it worked.
That is when the big intellectual leap happened. From IDEO, one of my favorite quotes was “Innovation = Invention + Opportunity.” We identified this invention and applied it to the opportunity, taking it out of the world of gaming and turn it into a web service that any business owner could use. So in 2007 we shifted the company to doing that and created the first gamification platform called Nitro and got our first customer. Back then we were too early in the market, and several evangelical and educational years followed. Then in 2010, Farmville and Foursquare exploded, and hundreds of millions of people were exposed to the power of these mechanics that motivate behavior. Our market started picking up a lot of competitors – there was more than $100 million of venture capital poured into the space. Then we continued to evolve our product, our vision, and our thinking. We moved from strictly consumer to the employee space, which is the fastest-growing part of our business right now. Those are the two main areas we focus on. We also published a book recently called “Loyalty 3.0,” which had a revolutionized customer and employee engagement with big data and Gamification. We were really excited to see that it hit The Wall Street Journal and The New York Times bestseller lists.