Bootstrapping to $35M via Affiliate Fees: Swagbucks Co-founder Scott Dudelson (Part 2)

Sramana: How did Swagbucks evolve from Prodégé? What was the thought process behind that transition?

Scott Dudelson: After we started getting charity organizations on board at Prodégé, we realized that if we could get internet users to use the Prodégé technology, we could make some money. We realized that charities were simply a distribution channel and that other distribution channels could exist. Because of my experience in the music industry, we were able to entertain the idea of creating private label search engines for celebrities and brands.

There still needed to be a value proposition for users. When it came to a celebrity or a brand search engine, the users doing a search would get a chance to win a point every time they did a search. Points could be redeemed for brand rewards. We made deals with the New York Giants, Kanye West, KISS, and various others. We created private label search engines that fans used to generate points that were redeemed for brand items. That was the first major pivot we did and the ultimate precursor to Swagbucks.

Sramana: We are talking about the very early stages of a company. How did the company get off the ground?

Scott Dudelson: Josef had a friend who put in $30,000 of seed money. Combined with the money that Josef added to the company, that was the initial amount of funding used to build the technology and get this concept off of the ground. Our early charity partners were small, local groups with great causes. When we pivoted into the music space, our first partners were Meatloaf and Winona Judd.

We had modest success with those two artists, and the timing was perfect because the music industry was looking for new ways to monetize websites. TV sales were falling, and a lot of brands saw our product as a way to monetize their fan base in a way that they had not been able to do. We expanded from there into most major music brands as well as several major sports teams.

Sramana: How did the numbers flow? What was the business model?

Scott Dudelson: The model was the same as it was for the charities. The brands served as distribution for search engines. Based on the revenue generated from their user base activity, we shared revenue back with the brand.

Sramana: Was Prodégé essentially an affiliate partner of Google and Yahoo?

Scott Dudelson: There are affiliate portals which can be white labeled. We white labeled those portals and gave them out to different brands. We still have one of those sites up, which is SearchWithKISS.com.

Sramana: If I was a fan of KISS, what would the SearchWithKISS website experience be like?

Scott Dudelson: Imagine a search engine that was skinned to the band KISS, and you essentially have the interface. You could do any web search that you wanted to do. You could search for home loans or anything else.

This segment is part 2 in the series : Bootstrapping to $35M via Affiliate Fees: Swagbucks Co-founder Scott Dudelson
1 2 3 4 5 6 7