Cal Poly senior project ‘Punchd’ acquired by Google

Cal Poly’s Learn By Doing philosophy has led former student Reed Morse to a full-time career with Google.

“Learn By Doing is completely true,” said Morse, the founder of Punchd, the now Google-owned smartphone application. “We wouldn’t be here without it.”

Although many online news sources claim the app was acquired for $10 million, Morse could not comment on the monetary amount.

The app, officially acquired by Google on July 11, features virtual punch cards as a way of creating a business loyalty program.

Instead of carrying paper cards to get “punched” by business owners, customers use smartphones to scan a Quick Response (QR) code (similar to a bar code) for virtual punches. After 10 punches, customers receive a complimentary item.

Morse and co-founder Grantland Chew (who has since left the company) took an upper division Android development class taught by associate professor David Janzen at Cal Poly. Cal Poly offered the class after Google donated 24 Android phones to the school’s computer science department for education purposes. Janzen asked the students to come prepared for class with three new ideas for smartphone apps.

Morse said he was the only one to bring any ideas to class.

That day, he presented his idea for a business loyalty punch card app.

Now, he works full-time at Google’s Mountain View, Calif., headquarters with a core team of five people, four of whom also graduated from Cal Poly.

This includes Xander Pollock, a co-founder and designer, Niket Desai, a co-founder and product lead, Matt Joanou, the marketing and sales lead, Kareem Nassar and Nat Welch, both engineers.

Before the Punchd team existed, though, the idea for the app had to be born.

“Professor Janzen was always talking about the transition from atoms to bits,” Morse said, alluding to the process of making tangible items virtual. “Janzen said those are always going to be successful ideas.”

Morse said the idea was further developed after visiting San Luis Obispo’s Quickly (recently renamed The Boba Stop), which features paper punch cards.

“Their cards just annoyed me,” he said. “I thought, ‘If this was on my phone, it would be so much easier.’”

Janzen said he collaborated with his class about the idea of taking loyalty punch cards and making them virtual.

“I immediately felt this was a great idea, but Reed and Grantland took it a step further,” he said.

In the spring of 2010, Morse and Chew approached Yukie Nishinaga, the marketing and public relations manager for the Cal Poly Corporation, in hopes of using the app in dining locations at Cal Poly.

“They had a shell of a product when they approached me, but I thought it was incredibly unique,” Nishinaga said. “They were both charismatic, and I told them we could test out their product on campus.”

Morse said he is thankful that Nishinaga gave them the opportunity to build a product.

“Yukie is amazing,” Morse said. “Punchd would not have succeeded without her support.”

Punchd is now used in five dining locations on campus: Jamba Juice, Peet’s Coffee & Tea, Village Market, The Avenue and Lucy’s Juice.

Morse had more going for him than just a good idea and charisma too, Janzen said.

“Reed definitely stood out as a student in his ability to think entrepreneurially,” he said.

With the development of a business loyalty app, it was necessary for the Punchd team to learn good business practices in addition to using their computer science skills.

“Technically it’s not a very complex program,” Morse said. “We knew that distribution would be our main struggle.”

SLO Donut Company owner Jacob Pickering provided an opportunity for product development in the early stages of Punchd as one of the first businesses to begin using the app.

“Jacob immediately understood and was really patient,” Morse said. “He helped us build a solid product.”

Now the doughut store is Punchd’s most popular store, with approximately 500 customers using the app and more than 3,000 punches given out.

“It’s the easiest product to use as a business owner,” Pickering said. “You can do anything you want by yourself through the website,” (making the account easy to manage).

SLO Donut Company currently uses an equal amount of paper and virtual punch cards. Pickering said the only drawback is that “there are anti-smartphone people out there who can’t use the app.”

Pickering said he spent time with Morse and Chew, helping them develop a fair rate for the businesses using Punchd. Eliminating the need to print paper cards is enough motivation for Pickering to switch to virtual punch cards, he said.

“Even if they charged us to use the program, I would still be saving money,” Pickering said.

Morse said Punchd will eventually need to charge business owners a monthly fee for the use of the program. Right now, however, Punchd is free for all users. The app is also free to download for all smartphone users.

Pickering said he would also like to see the app expand into social media sites.

“It would be cool if every time a punch happened, it would check in to Facebook, providing more marketing,” he said.

Morse said this feature will be available for Punchd users shortly.

The app also allows business owners to easily track loyalty card usage with an online account.

“It takes four or five minutes for business owners to register for Punchd,” Morse said. “It’s super convenient.”

Morse said he knows his app is effective for business owners.

“Studies have shown that retailers who use loyalty programs are 88 percent more profitable than those who don’t,” he said.

Many San Luis Obispo locals are supportive and excited for the Punchd team.

“From nothin’, they went big time,” Pickering said. “I’m totally stoked for those guys.”

Janzen said his first reaction was one of shock because Punchd is still so new and developing.

“I was not shocked that Google wanted to acquire them, but I was like ‘no way, this is too early.’”

Rammy Aburashed, the manager of Petra Mediterranean Pizza and Grill said he was surprised but supportive of them.

“I was shocked when I found out, but they deserve it,” he said.

Aburashed started using Punchd in his Mediterranean eatery on Feb. 15, and has already noticed a difference in business.

“We’ve had at least 10 customers that have filled their cards twice already,” he said.

Petra now has 215 people in its loyalty program and 900 punches have been given out since the restaurant started working with Punchd.

Nishinaga said she remembers when she heard the news that Punchd was acquired by Google.

“I was actually jumping around because I was so excited for them,” she said.

She also said she believes the team at Punchd had more than a good idea when deciding to develop Punchd.

“It’s one thing to have a good idea, but it takes an extraordinary person with drive to make it happen,” she said.