Interview with Scott Dudelson, Swagbucks

Story by Benjamin F. Kuo


For today's interview, we spoke with Los Angeles-based Swagbucks (, an online site which allows users to earn virtual currency in exchange for searching the Internet, as well as other activities. Swagbucks in on its way to hitting $20M in annual revenues, and has bootstrapped since its founding. We spoke with founder Scott Dudelson to hear more about the company.

Explain to me how Swagbucks works?

Scott Dudelson: Swagbucks is an online reward destination, where users can earn virtual currency and exchange that for real life rewards, including Amazon gift certifications, or PayPal cash. They earn that currency by taking actions online through the Swabucks portal, for things they might do every day already, such as Internet searching, shopping, looking at daily deals, and playing casual games. There are now more than fourteen different kinds of actions users can take to earn Swagbucks.

How did the company come about?

Scott Dudelson: Swagbucks came about from several different pivots by the company. We had started by creating a private label, search engine for charities. What we did, is we create a portal for these nonprofits, and did a revenue share. They'd promote the site to their constituents and supporters, to raise money for the company, and we'd share it back with them. Through that, it evolved into a rewards program, and instead of charities, we started bringing it out to brands. Those brands included the Green Bay Packers, World Wresting Entertainment, and so on. Those brands created reward portals around Internet search, so, for example, you might go to the New York Giants site, search through their branded portal, and you would earn points, which they could redeem for swag from the team. That mutated into us thinking why not have our own, central portal based on Swagbucks, which is where came along.

How long have you been running the site as a central portal?

Scott Dudelson: has been around since February of 2008.

Let's talk about you a little bit--what's your background and how did you get into this?

Scott Dudelson: The original concept was raising money for charity, using this technology. My ground had previously been in raising money for music related nonprofits, through the entertainment industry. I used to recruit bands to become spokespeople for charities, and got them to perform charity concerts. However, I discovered that all of those things took a lot of time and effort, and very often, no matter how big the event was, or how big the spokesperson deal was, the net for the organizations was really low. So, I began looking for a new way to raise money for charities, in a simple way. I wanted it to be something easy for a charity to implement, something easy for us to get going for charities. The internet search idea sounded amazing, and people just bought into it. The concept was very similar to what we're doing now, encouraging people to do what they do every day, but through us. Only, now it's not focused on nonprofit portals as much as it is around the Swagbucks brands--not to say that we don't also help charities.

It's difficult to get users to use things on a regular basis, how have you managed?

Scott Dudelson: We've been growing steadily over the past few years, and have never had a dip in revenues or users. It just keeps going up. It's not a meteoric rise -- we've been along for a long time -- and the type of thing we're doing is hard to get people involved in. However, once you build the trust and goodwill of your users, and buzz grows around the web, it becomes much easier. Over the course of the last three and a half years, we've maintained our integrity and built trust among our core users, who have spread the word around the web about what Swagbucks is, that it is legitimate--which, at first, was very difficult, given that the web traditionally has scam offers of a similar type.

I understand you're bootstrapped, but have built it to some sizeable revenues?

Scott Dudelson: Internet search is a very lucrative business, provided you have a very good base. Also, as we've seen users engage with Swagbucks, it's only been natural for us to go bring in other verticals that could generate money for the business, and also provide more opportunities for users. We've brought in things like surveys, special offers, daily deals, casual gaming. All of these different actions users can participate in generate us money. That, in turn, allows us to give back money in the form of Swagbucks for users. The growth has been very proportional to the verticals we've added. Also, as we've increased earning opportunities, our revenues have gone up, and the user numbers have gone up.

What's the biggest thing you've learned from the experience of building this business?

Scott Dudelson: It's on the general business side, but it's very applicable to Swagbucks. It's all about integrity, and being trustworthy. You can't run a business without integrity. From our perspective, you can't have a consumer engage with the product every day if you're not going to deliver on the promises you say you are going to provide.

Finally, what's next for you?

Scott Dudelson: We've got a few things on the horizon. Two things I'm particularly excited about are our mobile product, which we are launching in a couple of weeks. It will be a product where users can watch movie trailers, and video game trailers, and earn Swagbucks for that. Another thing, is we're going to be moving toward the social gaming space, and are getting some Facebook developers and social games developers to put their games on our site, which will allow our 3.5 million members to engage with their product.



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