The End of Ads with Ryan Hudson - S01 | E6

Lights are bright, we chase the sky. Media dreams, we take the flight. Partnerships, they lead the way. Success is what we aim today. Build the buzz.

Welcome to another episode of the Publisher's Playbook. Today on the show, I have a very special guest. He's one of the most successful people ever to get into affiliate marketing. Ryan Hudson was the co-founder of Honey, which completely revolutionized the idea of coupons and cashback. So much so that eventually it was acquired by PayPal for billions of dollars. And now he's on to his second act with a brand new company called Pi.org. I really wanted to talk to Ryan at this early stage of Pi. Well, he'll say it himself, they're still trying to figure things out. Personally, I have no doubt that Pi will have a massive influence on the advertising space, maybe even bigger than Honey did. This time around, Ryan's being even more ambitious with his vision. He's looking to disrupt the $600 billion ad market starting with— and here's where it gets kind of interesting— an ad blocker, and he's not doing it alone. He's got the band back together with a bunch of his friends and colleagues from his Honey days. So let's get into it and see what they're up to at pi.org. Ryan, welcome to the show.

Thanks for having me on.

Excited to talk to you. You were the co-founder of Honey and you ended up selling that company. I think you started it when? 2012? Honey?

Yeah, started end of 2012.

Yeah. And then sold it to PayPal in 2020, right at the beginning, just like just before the pandemic. Yep. For $4 billion. So not bad.

That's correct.

Not bad. Not a, not a bad exit there. And then I think the, the big question is gonna be, so I'll tell you, I have this, I have this question that I ask at dinner parties, which is, let's say, you know, independently wealthy, or your finance doesn't matter anymore, but you have to do something 8 hours a day. You just have to, right? You got to keep yourself busy. What is the thing that you do? And giving you the— I'll give you a few range of answers. Some of them are just like, nothing. I'm just gonna do nothing forever, right? I don't even know what that means. Just binge Netflix, eat a bunch of stuff, right? Other people are like, well, I'm gonna you know, I'm gonna become a musician, I'm gonna learn guitar and I'm gonna play in a band. You decided to do another startup. So the big question I have here is why?

Why not? I mean, it's a starting point, but no, after it, after we sold the company, um, I had a lot of time to sit around and ask that question. And, uh, I very deliberately didn't jump back into building something again. I think we'll circle back to it, but I think at my core I'm a builder. I intentionally gave myself a mental framework of exploration of, hey, in this world where you could do anything, what would you do? And understanding especially the inertia of startups where it's a 10-year journey, even if things go great and it's a shorter journey if things don't go great, but in that case it's probably less fun. I sat around for a while and did some exploration. I did the doing nothing version of answering the question. And what I realized talking to a lot of my friends who happen to be on the Honey journey with me is that we all really, really loved working together at Honey and we had built something special and there was an itch to recapture some of that magic that we had going. And it was kind of the catalyst of, hey, what if I could build things with some of my best friends and, uh, that that seems like a lot of fun. And if I had to spend 8 or 10 or 12 hours a day, that seems like a great way to do it. So that's kind of where I landed a little over a year ago, talking to Chris, who built our partnership team. And I'm sure maybe some people in the audience know Chris Aragon. We realized that if we could, quote, get the band back together, um, it would be a lot of fun for everybody. That's the starting point. We didn't even know what we were going to do. Um, but the starting point was just, hey, this is how we want to spend our time together. It's building interesting things that matter with a bunch of people that we like working with and we trust are great at their job.

Yeah. And obviously it's just, it's not financial motivation at this point. So getting together with friends, hanging out, building something isn't it? Because you could have done that on a yacht as well, right? You can hang out with friends on a yacht. So There must be something about this idea of working together that dynamic must just motivate you, right?

Yeah, it's the things that you can build together are just so much greater than what any individual could do. And so having a core group of people that complement each other's skills and expertise and interests is such a— over the past year, it's been such a— feels like a hack compared to the first time we did it where Actually, it took a long time to get to a point where we have exceptional people in all of the seats. This time around, we've been able to pull a lot of the same people back into similar sorts of roles, and it's just instant chemistry.

Yeah.

So it's been, it's been a joy as a leader to see the team self-assemble that way.

Oh, cool. And the company that you started is called PIE.org. So explain what— and that stands for the People's Internet Experiment, right? So I have two questions here. One is you're calling it an experiment right in the name, which I think is interesting. Like just getting it right out there, like who knows how this is gonna go essentially, but we've got a, we've got a hypothesis and we're gonna test it out. So tell me why, why call it the People's Internet Experiment?

Yeah, and then hone right in on that, the experiment word. And to me that's a special one. Uh, every startup is an experiment in a whole, or a series of experiments to see if what you're building is something that people are interested in, if you can grow the number of people that are interested in it at a reasonable price, and if ultimately you can attach a monetization strategy to that. And so there's just so many unknowns entering it. My hypothesis when we started it was that there's a market missing opportunity for, um, somebody to build a truly consumer-aligned tech company. I think if you look around the world today, there's a lot of backlash against big tech, and I think that's in many ways warranted. In other ways, it's unfortunate where you have companies that started off with premise of don't be evil as their core foundational juxtaposition against Microsoft, and they've now reached the point where they're the ones that people are pointing to as a problem in some areas. And so I think to me there is just this recognition from the world of affiliate marketing and running a loyalty cashback program for the better part of a decade that over in this corner of the advertising world, we've actually figured out the core problem that exists in the rest of the advertising market. And that's really the consumer alignment. So we have, where we built the only type of advertising where consumers are directly incentivized to participate in the ecosystem. And so it's kind of clicked for me that, hey, we had this really special thing over doing cashback and affiliate, and what if you extended something like that out to the rest of the ad spend, which is 100x as big? So every dollar running through affiliate programs, another $100 are going through other ad campaigns. And, uh, it seemed like, hey, what if we solve this problem by purely aligning the interest of the company with the users? And we actually did a whole bunch of mind safari exploration, including with legal on could you actually make the users equity owners and participate in the company that way? In the current regulatory frameworks, I was counseled that that would be quite illegal.

I see.

And, uh, yeah.

Oh, illegal. Yeah.

And the one thing I wouldn't want to do, you talked about how do you spend 8 hours a day? I wouldn't wanna spend 24 hours a day in jail.

So.

Uh, we, we pulled back from that vision a little bit and, uh, realized that, hey, we can still align our business model with consumers by including them in advertising transactions. So at the end of the day, it was, uh, that realization. And then we've now, uh, the second half of the experimenting question is how do you get a whole bunch of people to participate in that type of ecosystem? And having come from a browser extension world, um, we realized that there's this other category of ad or a browser extension that's order of magnitude larger than shopping extensions ever were. Like at, at the peak, Honey was tens of millions of users. Ad blockers with no marketing and not really a business model are used by close to a billion users now.

Yeah.

And so we saw an opportunity for us to maybe go to market with that. This is still unproven test. Do consumers want a different ad blocking experience? And for us, the bet is that most consumers are frustrated with the choice of either you have an ad blocker that aggressively blocks everything and breaks the economics of the open internet, and you start running into paywalls and other ways to, to manage against the monetization side of that. Or you accept a whole bunch of advertising and tracking and distraction. And I feel like there's this middle ground that most consumers would choose if they had the right incentive to participate. And so that is the experiment. That's the People's Internet experiment, is can, can we build or rebuild the economic engine of the internet for the people? And if, if we're successful, I think it's a pretty important thing. So back to your question of why am I doing this? Yeah, I think it's one of the things I saw in my framework for what do I want to spend time on, that my framework was basically what is something I can do that somebody else isn't going to do otherwise. And so there's a ton of cool stuff going on in AI, there's a ton of, uh, innovation happening there. My initial mind safari exploration is, hey, maybe I should do something super hard tech and like nobody's gonna do it because it's a terrible business idea.

Yeah.

So basically where a lot of those landed and I circled back to, hey, I, I see a way to do this and I don't think a lot of other people are looking at it this way. Uh, the same way when we started off with the browser extension as a product, people were giving us a, hey, what's your mobile strategy? What's your mobile app? And yeah, we spent the first 3 years of the company not able to raise a single penny from an outside investor. Um, because we didn't have a mobile strategy that was, uh, acceptable to them. So I realized we have like a lot of, uh, domain context on the browser extension world. In running our cashback program, we realized how awful, um, ad blockers are for people trying to run cashback loyalty programs. They block your tracking. So you promise a user cashback and then they haven't, ad blocker, or 2 or 3 or 4 or 5 ad blockers, and somewhere along the line that attribution breaks down. And so, uh, we, we fought this every day running Honey of how do we manage that situation in a way where we're not, we're not the ones that are disappointing the user. And so we developed a lot of expertise in, uh, how ad blocking works, and I realized, hey, well, this, this team is the one that needs to do this. So let's get the band back together and see how far we can take it.

Well, I see a couple parallels with Honey too that maybe I'm making some assumptions here, but I know when you guys started Honey, there wasn't really any monetization for the first while. It was just, hey, what helps out a user here? You get to that cart, you see that promo code box, and there's this like fear, like we all get that like anxiety, like we're missing out on some deal. They wouldn't put this box here unless there's a promo code. So you go scour the internet, you try and find something. Most of them don't work. So you're sitting there and you're just getting more and more frustrated. And I think like the, the little insight there on Honey was, hey, wouldn't that be cool if it just went and checked for you, put it in there, and then you don't have that anxiety that's like, hey, I missed out on a deal. But there was no real monetization for the first while. So that's really, it's really easy to be user or consumer aligned when you don't, when you're not making any money 'cause you're just thinking about them. And I kind of see that same thing that you're doing with Pi, which is, hey, it's an ad blocker. It doesn't really make any money yet. You're just helping people, you know, have a cleaner internet experience. But eventually it's like the money will come. If you get enough of the users, you're keeping them happy, they keep coming back, there's probably monetization there. Is that how it's, is that a parallel between Honey or is this different? Are you taking a different approach this time?

I think we're going to try to do the monetization side of it faster than it— we were able to last time, just because we have a lot more understanding of how the ecosystem works than we did with Honey. But at the core, that is the bet, is if we build products that are loved by— instead of this time tens of millions of users, what if we are loved by hundreds of millions of users? Um, like with Honey, I told people before— people being investors— before we made money, I'm like, We're the last button people are clicking before they choose to buy anything online. If we can't figure out how to monetize this, we shouldn't be doing entrepreneur things. I kind of feel the same way with an ad blocker or the promise of managing your ads. Like we're sitting at the center of literally hundreds of billions of dollars in value and mediating it on behalf of constituency that right now doesn't have a say in the game. And so I, I think naturally there's a lot of different ways monetization opportunities would follow. We have a lot of ideas on how we would do that. And so we're going to try to build them faster and make the unit economics click sooner than we did with Honey. Literally took 3 years and then hiring the right person from the affiliate marketing world to, to navigate it. My co-founder George and I, we approached the affiliate networks when we first started the company. And it was on the heels of, uh, some bad actors in toolbar space had burned a lot of the advertisers and we had no idea about any of that. And so we're like, hey, we've got this thing. And they're like, you guys are probably criminals, so go away. And so we did. Um, and it wasn't until we had somebody from within the network world to help us navigate, help us, uh, communicate the value proposition that you just described of Hey, this is a user behavior. People are abandoning their cart because they don't have the answer to this question. What you just said is something I've been saying for 12 years on, on why that makes sense. But it's really optimizing the conversion rate. And so that was a huge piece of what we're doing with Honey. In doing that, the commission rates are designed around optimizing conversion rate. Not being up funnel in the demand flow. And so we got questions, and everybody does, around incrementality for a better part of a decade. And this time with what we're doing in Pi, I think we're tackling that immediately. We think there's a lot of opportunities to build advertising products that outperform anything that they're getting from Google or Facebook or Amazon. And unlock a lot of that consumer purchase intent up funnel in a very value-generating way for not just the consumer but also the advertiser. So I'm really hopeful that we can build the answer to that. What was this incremental day one instead of explaining it how you did and taking a little while for it to click and having lots of different reception on it, on that message over time. And it took a lot of time for people to run their own incrementality tests and get comfortable with what the value of this traffic and this experience was to them. And I think in a search environment or other types of advertising, a lot of that infrastructure's already in place. And instead of spending 4 or 5 or 6% commission rate, they're spending literally well into double digits for customer acquisition through all of the other channels. And so there's this massive gap between what affiliate marketing portion of the, the ad stack has been able to play in. And I kind of date that back to the origins of affiliate marketing and it kind of being set up well to be a last-click optimization. And not surprisingly, a lot of the tools and services that performed well in that are like conversion rate optimization, not top-of-funnel demand generation. And so Basically you had a bifurcation of this perfect marketing model where you've got performance marketing, you're only paying for sales. Everybody would say they want that the way they're doing it with last-click attribution optimized for people that are closest to the transaction. And so advertiser, like people like Google and Facebook and others realized that, hey, I'm not going to do that type of pricing on it. Actually, it's best for me as Google to have an auction-based price on clicks and people can figure out, or we'll help them figure out what that was worth to them. And so it kind of like separated the traffic flows, those, those two different ways. And I think with what we're doing with Pi, I think we have a chance to bridge that gap a little bit and give performance marketing-like characteristics to an ad spend where you're, you're getting great return on ad spend. You've got like confirmation of transactions. You actually track it all the way through the returns flow, which is a huge issue for many categories. And use that as your source of truth on are your ad campaigns performing?

Yeah. Well, let's walk through this. How, because you actually have two browser extensions, I believe that you've launched. And here's a funny little stat. I come from Originally, I don't come from affiliate, I came from the display and sponsored content world, right? And the company was acquired by Impact a few years ago. And I did this study once because I had an ad blocker. I'm in advertising, my entire income depends on advertising being successful, and I was in the display advertising world and I had an ad blocker. So I did a survey of other people in the ad industry and I think it was something like people in the ad industry are 4 times more likely to have an ad blocker than people outside of the ad industry. I'm like, it's like, it's like being a dentist and being like, I don't brush my teeth kind of thing, right? It's just like the opposite of what you would expect. But I always thought that was interesting. So you have the ad blocker and then you also have a, I believe like a cashback type reward. So maybe explain how these two things might end up working together and on the ad blocker, everyone should go and download it, you have this really cool, it seems really simple, but this little animation that happens where the ads disappear and, you know, it's like these purple boxes that kind of go away, which the reason I find it interesting, I've used ad blockers before, is that it reminds you that you have an ad blocker actually and what your, you know, what the experience, it's like a before and after every single time. Whereas most ad blockers, you just never knew they were there until you end up shutting off your ad blocker at some point in the future. That little insight, I don't know how you guys kind of discovered that, but I find that probably one of the most interesting things that differentiates, you know, the Pi ad blocker from other ones that I've used in the past. Where did that insight come from?

Yeah, this one's going to be a great story, even more so than it is someday. Just that was not anywhere in anybody's minds when we started the company. We're working on things, kind of had an insight that the ad blocking user experience for all these ad blockers, they're used by a billion people, but they're effectively designed by tech people for tech people. And the sorts of ways they tell you that they're working are, we saved you mega, some number of megabytes of bandwidth, or like we blocked some absurd number of trackers, whatever that means to the average user. So the way that— we call it visual mode. It's a visual mode for seeing what's happening in your ad blocker, and we calculate the percentage of your screen real estate that's saved as a metric that we think users would care about more. It's optional. You can turn it off. We thought it would be potentially annoying to, like, longtime ad blockers to have this artifact happening, an animation on your screen. It's shocking how many of us on the team who were anti this feature even existing are using it still today. The origin of it is literally one of our engineers built a mode so that he could see if he was effectively blocking ads. So it was an internal tool that when I saw it, I'm like, Anthony, that's genius. We need to make that available. This is how you tell somebody that their ad blocker's working. So you're right, an ad blocker, the working use case, uh, you usually see nothing and it's only when it's not working correctly that you have artifacts of it, the existence of it. And so I think flipping that has been, uh, a, a cool insight and it was literally just engineer working on, on feature and along the way, this is where it's an experiment. You, you figure things out. And being surrounded by very smart people with a lot of capability and context has been so much fun. Yeah, I'm sure that won't be the last feature or thing that ends up in the product, like with a similar story to that of just, yeah, let's find good people and let them cook. Yeah.

And so you have this ad blocker, it works great. Another cool thing, uh, I, I'm drawing a parallel with Honey is, so I, I didn't know about cashback and these browser extensions and stuff. It just, as a regular human in the world, right? I didn't know that there was all these things, but I knew about Honey because Honey was marketed more the way you'd market like a CPG company or a pair of jeans. Like it was just much, I don't know, shinier or what the word is, but it just felt very accessible to regular people. You didn't have to know how the tech worked or anything like that. You just downloaded, popped up. Filled up the coupon spot. I see that same thing with this ad blocker. It's just there. It's, it's nice, it's friendly. I don't know if that's kind of the wording of it, but it just feels very accessible. So I imagine you're gonna get traction. You're right. No one cares or knows what you're talking about when you say you have this many trackers that were on there, or this many, your browser loaded this much faster. And we're talking about like milliseconds, right? That doesn't, yep. People don't understand what that is, but where, when they look at, they go to Amazon and they see that 80% of the real estate, let's say, was sponsored listings or something like that on a given page, that hits you pretty quickly. You're like, wow, that was, sometimes you don't even realize how many things are ads on a page until they disappear and you're left with the organic results, right?

Oh, absolutely. We haven't figured out the exact way to talk about this, and I'm sure you'll see a whole bunch of experimentation again with a lot of the most creative creator influencers in the world. But something that's like a seed of an idea in my mind right now is like, what if every time you tried to watch TV or do anything, it's like you're walking into Times Square? I mean, that's the level of visual assault on your senses that happens without an ad blocker. And so I think people would prefer not to watch TV in Times Square. And I think we'll come up with a lot of ways to communicate that sort of message through to the end user. It is so— as a longtime adblock user, it is surprising to me how many people don't use an adblocker. And we've done a bunch of research on the reasons why. And the surprising one that like makes sense in hindsight is they just don't know which one they can trust. Like, they have this problem of, I'm being tracked and whatever. And then you're asked to install a browser extension which has the ability to do way worse things if it's— if you don't trust it. And like, shockingly, most of these large ad blocking tools that people use are made by companies— not, not to be an American-centric person, but like, they're made by countries around the world that you probably would like think twice about installing software if you knew that's where this thing that you thought was saving your eyeballs from, no business model other than it's free. It's like, actually, the people that are telling me they didn't know if they could trust it, they're probably right in some, in some number of the cases. And so I do think there's a chance to educate consumers and build a brand that people believe in the same way we did with Honey. And I think a lot of that is going to be doing similar things to what we did last time where with Honey, we had a too good to be true value proposition. You install this software one, one time, and the next time you go shopping, we might save you money and we'll give you cash back. Like, wow, that sounds great. Our value proposition now, if you go to pi.org, it says block ads, get paid. Like, that's a contradictory business model and brand proposition. And so We, we think building that consumer trust and actually delivering on it is so important to what we're, we're trying to do. And communicating that effectively is one piece, but like just baking that core into our DNA is like, it goes back to the earliest days of Honey when, when we couldn't make money through affiliates, we didn't know how to speak the language and we had this product we couldn't raise money for because it was a mobile, there was no mobile strategy.

Right.

We were approached by all sorts of shady people from around the world with ways to monetize our traffic. And even when it looked like a complete zero, George and I were like, absolutely not. There's no way we'll do it. I'd rather take the L. And so that was so formative and just like clarity on doing the right thing. And that DNA is in the group of people that are building Pi now. And it's something that is absolutely core to who we are.

Yeah, well, let's talk about how you're going to monetize this. I know this might change over time, but as of today, are you monetizing the ad blocker? So that this promise of block ads, get paid— let's talk about the get paid part.

All right, so couple pieces you mentioned earlier. We have two browser extensions. One is a shopping, uh, coupons and cashback sort of tool very similar to many people in the industry, look pretty familiar. And the second piece is the ad blocker. The reason it's two pieces on Chrome is because Google requires that browser extensions have a single purpose. And we proposed that our combined purpose was, was a single purpose, giving consumers control over their advertising experience and rewards for it. That didn't make it through the review process. And so we have two browser extensions because of that. On mobile, we have a mobile Safari extension and it's a single thing. So you download an app and you can get ad blocking and coupons and cashback in mobile Safari. It's pretty awesome. That didn't exist until after we sold Honey to PayPal. So that, that feels like a brand new thing that I think there's a lot of opportunity to, to expose consumers to. The way we make money piece, it kind of starts the foundational level is I do think the ultimate business model is this cashback loyalty rewards concept. And so we built the coupons and cashback capability to be very familiar to advertisers and within the affiliate space that we know well. And so our, our plan is to engage with advertisers and we're doing this with thousands of people right now. We're ramping them up on what I think is the best technical version of this. It's built by the same people that built what I think was previously the best technical version of this. And it's faster, it's more reliable. And so I think that experience for advertisers, pretty straightforward. The part that I'm most excited about, and if we were just doing that, I wouldn't be doing this. Honestly, this is not just a Honey 2.0. Literally, this is a build something better. And the next piece is for our advertiser partners having a, an upstream, uh, solution. And so what we're doing with Pi is, uh, infinitely easier than what we tried to do with Honey. And we had Honey offers and we tried to effectively index the entire shoppable universe of products at any point in time and have real-time availability and pricing. And then at one point we tried to make it shoppable through a universal art, you know, we had hundreds of engineers working on this for years. And it's a, a very, very challenging thing to then also make recommendations to a consumer on things that we think they might want to buy. And that was Honey Offers, is attaching incentives to individual products. Really, really hard. I think we did a great job with it. Um, but this time it was like, hey, let's rethink how hard this needs to be for us and what the advertisers are really asking us for. And what they're asking us for is a more effective advertising channel to reach consumers that are interested. And so, um, we're building in a, basically the, the current bet. And so you mentioned subject to change. Yeah. Is, uh, an instant rewards ad platform for consumers on CPC advertising.

Mm-hmm.

Where we give consumers a, an incentive to click. And so if you're in advertising, you understand that most advertising dollars are running through campaigns like this. People have a pretty good sense of what that's worth, whether it's in a search context or other contexts. So we think being able to communicate the value to the advertisers makes sense. The part that obviously is the first question is how do you manage fraud? How do you manage adverse selection where it's just people clicking for rewards and they're not buying anything? And this is where I think we have the magic of the affiliate ecosystem behind us is we actually have that conversion signal partnering with affiliate networks where we understand if consumers are getting, if they're delivering value to advertisers. And we're, the system we're building effectively is designed to incentivize consumers who transact, which is what advertisers want. With more offers and larger offers and penalize isn't the right word, but phase out users who don't transact and deliver for advertisers. And so we've effectively naturally managed the, and we effectively automatically manage the fraud situation doing that. And it's because of our persistent logged in user experience that we're able to do something like that. So I think we have like pieces to build the first that I know of, consumer incentivized CPC program, potentially at pretty large scale. And to me as a consumer, that feels great. Where instead of the only promise being, hey, we deliver on our promise and as a seller and you engage with this advertisement, we'll give you cash back when you actually find something you want to buy. I think there's a huge chance to engage consumers where you're effectively just buying their time and attention. It's like attention is the scarcest thing out there and what people are willing to spend their time looking at matters. And if we can build a way to encourage consumers to reengage with you or to discover a brand that they wouldn't have otherwise considered, to me that's like the perfect value exchange for advertising. And if we can do that cost effectively versus the other channels out there, I think it, it can be a really powerful thing.

And let's walk through— can you paint, paint a picture of what this would look like? Like, let's just use a shoe company as the advertiser, let's say, or some sort of scenario, because I'm curious as a user, what is my experience like? You know, I'm blocking the ads, what happens next? How does the advertiser get displayed? And then, and I, again, I know this is going to change 1,000 times.

Yep. So now we're V1, uh, super V1, but the vision is effectively, um, as an advertiser, you can run a CPC-style campaign or a return on ad spend style campaign similar to what you do in other click networks. The consumer experience is effectively what you described. It's, I have an ad blocker, I'm blocking ads. One of the things we ask consumers if is if they want to opt in to rewards for ads, and that comes in a few different flavors. The version that I've talked about, we call it Instant Rewards. And so one of the things I think's extra cool about doing it this way versus traditional cashback through affiliate programs is we can just instantly clear the balance. So it's not waiting 2 months or till you actually get the reward as a consumer, which I think is kind of cool. We spent many years trying to figure out how to like shorten that timeline and like manage that process, never really nailed it. So you opt into rewards for ads, your ad blocker then periodically in the right context gives you opportunities to engage with advertisers. So it's not replacing the ads on a page or anything like that. It's more, you can think of it as like a popup offer that appears in certain, like certain intent scenarios or in, like low intent, like pull you out of, uh, I'm in a passive consumption of content mode. It's like, hey, maybe I would consider trying a new brand or something like that. So yeah, a bunch of different services. I think a lot of them initially will look search and high intent related. Um, I think we'll build some things for retargeting that are outside of email. We know retargeting can work really well. It's one of the things that worked or maybe still works. I haven't, um, I'm not as close to it. The display world, like the retargeting basically for a long time was the bread and butter of what sort of campaigns can actually work. And so probably build basically, uh, ad solutions that work and I think pricing ends up just naturally not being at endgame monopoly. Everybody's bidding all of their marginal profit into these highly efficient auction systems. And so I think especially for our earliest partners, there's being massive opportunity.

That makes sense. So because originally I was thinking, okay, because I've seen the model where it's like I have an ad blocker and then the deal is if I essentially shut off my ad blocker, then I'll make some sort of rewards. But that's not really what we're saying here. We're saying, listen, we're going to clean up the internet for you and then we're going to be an ad network of sorts that's going to serve like specifically relevant based on what you're searching for. Hey, I was searching for shoes. You know what? We found an offer that's available for shoes. We know you're interested in that. And that'll be delivered through your browser extension essentially, rather than just being opening it back up on the page.

Yep. I think that, that's, that's the part I'm most excited about. We do also have a concept that we'll play with called Fair Ads, and that's more like what you've described where there's a few ad blockers out there that have acceptable ads as a program where the advertisers are paying to allow certain types of advertising through the ad blocker. We think that's an interesting model. The part that I think is vastly different in how we think about it than the people doing the acceptable ads today is that for us, that revenue is just pure pass-through to the consumer as a reward. So we made a commitment that our Fair Ads program, any revenue that an advertiser would pay to basically unblock their advertising to, for consumers that opt into that. Um, it was just straight pass-through into points rewards program. Yeah, it's really cool.

You're basically using the same as cashback, which, you know, cashback hasn't been around that long. I mean, I remember like Ebates and there was some stuff there, right? I remember those ads on TV from like way back when. So maybe let's call it like 10, 15 years of that cashback model. But the idea was, hey, the advertiser, is going to give the company some money and we're going to give some of that money back to you. You're essentially taking that concept and saying, hey, this could also work for like the display ecosystem, which you're right, the general advertising ecosystem is like a $600 billion plus market. And then affiliate's like a $12 to $15 billion market. So what if you could access, what if you could take some of the learnings you've had in this affiliate space and then apply them to like this broader upper funnel type advertising market, right? That's really interesting.

Yeah, I think it makes a ton of sense. And it, the ideas behind it aren't like that new. Yeah. In the sense that like back in the early dot-com era, there was some companies that had toolbars that would give you money for seeing display ads. There was entire business model where I can't remember the name, but they give you a free computer if they're allowed to run ads on it. The thing that, the thing that a lot of those ran into is just that adverse selection and making sure that you are actually delivering value to the advertiser. And so to me, that's the, the, the insight that we'll, we'll find out if it's, if it, if we can do it. Yeah, I have confidence that we're going to give it a really good shot. But I think that the cashback model is the ultimate alignment between advertiser and publisher and end user, most importantly. Historically, an advertising transaction is a deal between a publisher and an advertiser, and the consumer is collateral damage, sometimes just ignored. They don't have a financial stake in it. And ad blocking has become the only solution consumers have to manage that experience. Our bet is that most consumers actually do want to have a free, open internet with the publishers making money on the right type of advertising opportunities. And we think many people will in fact opt back into that. And in fact, you see evidence that this might be true in the Acceptable Ads model. Two of the largest ad blockers are owned by one company that runs the Acceptable Ads program.

Yeah.

And they have 100 million+ users. And so the, the most popular, most distributed ad blockers actually don't block all the ads.

Uh, oh yeah.

It's kind of an interesting thing. Um, but what they don't do is have a business model that aligns themself with the consumer. And I think if they did, it would be completely different, um, advertising ecosystem out there.

Yeah. So you've got the, you have both of these browser extensions on Chrome. You have the single one, which is your ideal scenario already on Safari. When you did Honey, you guys built up the user base for years and then went to advertisers. This time it sounds like you're going to be running both You know, you're gonna get users and you're gonna start introducing brands and advertisers to this at the same time. So what is the, like, do you, how do you manage those two priorities? And if you were like our audiences, publishers and advertisers, agencies, like what are you in market right now focused on?

So in market we're focused on getting the foundational pieces in place for our coupons, cashback, very traditional offering. And the reason for that is it is the underpinning for our, the instant rewards system, like our attribution system. We're not going to ask you to go and get your tech team to put in new pixels for tracking checkouts or anything like that. We're actually going to use the systems that are built by great partners like Impact that are already installed, that are already hooked all the way through to managing returns and doing anything like that. So our foundation is to integrate in this world of affiliate marketing, performance marketing, because ultimately we're building performance marketing, in this case for CPC products. So we're not in market with that yet. We have about 30 people on the team now and we are cranking to build out the process, build out the, the, on the product side, building out the platform to run those types of campaigns. Consumer Experience right now has some test versions of these things, so we're gathering some data. But ultimately, probably early next year, we'll be ready to start piloting the cooler part that I've talked about. But to, to be in that right now, it's partner with us, let us into the base level programs at least, and for coupons and cashback, and that will let our team integrate all of the tracking and things like that so that we're in a position to partner on what I think everybody will agree is the more exciting part of what we're doing. That said, I do think we're building the best coupons, cashback tools as well. So it's not like we could build a great business just doing that. I just think we can do bigger ambitions, a little bit more this time, bigger ambitions this time around. Other than that, you know, it's really, really, it's about reaching people outside of the, you mentioned like you didn't know cashback was a things. It's like, yeah, how do you reach audiences outside of the traditional products that are used within affiliate marketing today? And so it's, it's been for the past decade, people finding all the people that are interested in coupon cashback value proposition is the bulk of the traffic. And the part that I'm most excited about is we're finding people that either are replacing their ad blocker with us and that they basically are not accessible to any other marketing. So it's like if you have an ad blocker, guess what? The only way to market to that audience is something like what we're doing. Yeah. And then there's just the scale of the audience that would never consider a shopping tool that would be interested in an ad blocking and an instant reward value proposition. It's like part of it. It's like, I don't care about cashback because I don't even see it until 2 months after I've made my purchase. I want immediate gratification. I want it now.

Yeah. So yeah. And like you mentioned this before, I didn't realize this when I started my first business, which is it's a 10-year, like it's a commitment. I even, I had a co-founder and I'm like, we get along good. I didn't realize that you're basically married to this person for the life of the company.

At least, yeah.

At least, at least, or in your case, again, coming back in with the second company. People don't realize that there's this long timeline to most companies, right? So if you, you know, 10 years from now, I know that's a big, big leap to go from today, but what do you look back on and you'd say, you know, the blog post would be like, yeah, PIE was what I, I am proud of it for this reason. What, what do you think that might be?

I think it would be, or not— we feel like we're just scratching the surface again. Um, but part of that to me is just like, as we were building Honey, we had a lot of, uh, thoughts on like what happens when you get to certain scale and there's different experiences you can unlock. Um, to me, like, we're nowhere near building something like this, but one of the missing things of internet infrastructure is just the payments, the payments piece of it. Being tied to credit card size transactions where you've got processing fees that basically prohibit a lot of type of economic activity. Like sub-$5 is nonexistent because of the transaction fees. And we're building again, a platform that's going to have hopefully hundreds of millions of users with a funded digital wallet of points that are accumulated through relatively throwaway actions from their point of view. It's like, this isn't me taking money outta my bank account and wiring it to some like crypto exchange to then buy something to like do that, all that friction. It's like, this is just gonna happen naturally as part of my normal browsing. And so I think 10 years from now, maybe we'll have moved fast and worked on stuff like that. But I can imagine enabling micropayments that allow you to do things unlock paying publishers for content. Um, you can't really do that on an article level right now just because of the infrastructure.

Mm-hmm.

Well, what if your browser just made that really easy to unlock?

Yeah.

So stuff like that is, I, I think likely things I would be very excited about continuing to solve. And, and really it's about like, how do we make the open internet a more vibrant, better place? Uh, the trend over the past 10 years has been toward closed systems controlled by the biggest tech companies. And I don't think that's healthy for the world. I think it's, you're seeing new types of consumer products not exist for sale just 'cause the cost of acquisition is so efficient through the different channels that you can't launch new brands anymore. There was a D2C wave a decade ago that's mostly fizzled out just because of, uh, the economics of customer acquisition that people used to think the internet would be the cheaper way to acquire customers and now like a store is cheaper. Yeah. Like do you see brands, the store, everything's cheaper until it isn't, right?

Like once you've moved all of the dollars into that, I have a friend that's in marketing and he goes, the cheapest advertising out there is TV ads because they don't know what they're worth. Right. Yeah.

So it's like, it's got baked in uncertainty, uh, dispre— like premium discount. Um, so yeah, stuff like that is just, uh, fascinating to think about what you could do if you were aligned with a consumer building software for them. I think in the world of AI, as people build AI agents, do you really want to upload all of your credentials and permissions and stuff to the cloud so that OpenAI can process it for you there? Or would you rather that be embedded within your browsing experience? Like, I think, I think we'll see a lot of opportunities like that. So to me Building large-scale consumer software is like a forever project. I don't think it'll ever be done. And so my, my 10-year answer is I hope we're doing all the things I think we can do and so excited about all the things that we might be able to do next.

For sure. Well, I am, I'm glad we got to talk to you now and then let's touch base. Well, you know, we'll check in every year and we'll see what's changed and what's been the same. You've got the experience behind you, you've got the team that's there, you understand the business model, you're already rolling along, the product looks great off the start. So I think, uh, if I was, if I was to bet, I think we could bet on Pi at this point. So good to have you on the, so good to have you on the show and we can't wait to see where you go with this.

Thank you. It's, it's gonna be fun one way or the other.

For sure. At least you get to hang out with your friends. Exactly. Or at least you hang out with your friends for a few years. All right. Thanks, Ryan.

Take care.

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