Spin The Bottle, Video Games, And The Office

Blaise Zerega is not a rational actor.  Studying why people do certain things is all the rage. Best-sellers like Freakonomics, Stumbling on Happiness, and Predictably Irrational are on the desks of executives everywhere. But rather than merely read about the dismal science, you can participate in it by visiting web sites built by a brainy, 10-person Silicon Valley start-up called Bunchball.

Are you a fan of The Office? Then visit Dunder Mifflin Infinity, which Bunchball built for NBC. A high school athlete? Then check out Takkle, undertaken for Sports Illustrated.Or, are you a teenage girl? There's Espin (as in Spin The Bottle) for you and your friends. That's a project Bunchball did with Hearst.

What these sites have in common is the ability to influence user behavior. The result is stickiness and engagement. "What do we know that's more engaging than video games? Nothing," says Rajat Paharia, CEO and founder.

A self-taught behavioral economist and former IDEO designer, Paharia's technology relies on five tools:

1. Points - awarding points to users when they do certain things like post on a forum.

2. Levels - same principle as frequent flier elite status or karate's different belts

3. Challenges - people like to be given a mission, something to go out and achieve

4. Leaderboard - rankings spur persistent engagement. Think of how many quarters you wasted on Space Invader or Asteroids just to see your initials in the Top Ten.

5. Virtual Goods - critical for enabling community members to express themselves creatively and indicative of status. Avatar envy comes to mind...

To see four of our basic human motivations - reward, status, achievement, competition, so nakedly revealed by web sites is striking. And there's something elegantly primal behind Bunchball's business proposition: "Sites have users. Users do things on sites, and sites make money. Bunchball ... gets users to do more of those things, and sites make more money."

Paharia founded Bunchball in early 2005 and in May 2006 received $100,000 in angel money, and in October 2006 raised first round funding from Adobe and Granite Ventures. The company's revenues (undisclosed) are from monthly licensing fees. In the works are revenue sharing agreements with sites whose advertisers want pay-for-performance.