Honey co-founder Ryan Hudson sets the record straight on viral scam accusations — and reveals his new ad-blocking startup Pi

Summary

Ryan Hudson co-founded Honey in 2012 as a browser extension that automatically applied coupon codes at checkout. The product grew slowly — the feedback loop from install to first successful coupon took weeks to months — but from 2015 to 2020 the company rode a sharp growth curve after adding a cashback loyalty program called Honey Gold and building out its affiliate marketing model. PayPal acquired Honey in 2020. Hudson left formally in early 2022.

The business model

Honey's revenue, from first dollar to last, was affiliate marketing. When a user checked out through a retailer partnership, Honey earned a small commission and rebated a portion back to the consumer as cashback. Hudson is clear that commission rates were low — nothing like the double-digit percentages retailers pay Google or Meta — because Honey was intervening at the end of the purchase journey, not driving top-of-funnel discovery. The core value proposition to retailers was reducing cart abandonment: roughly 70–80% of shoppers with high purchase intent left before completing checkout, often because the empty coupon code field sent them off to find a discount elsewhere and they never came back.

The viral scam accusations

A YouTube video posted just before Christmas 2024 accused Honey of systematically stealing affiliate commissions from influencers and withholding better coupon codes from consumers. It drew on Honey's own influencer marketing spend — over $100 million paid to creators over the years — to lend the story credibility with audiences who recognized the brand from sponsorships. The original video passed 17 million views; follow-on videos generated more in aggregate. Class action lawsuits against PayPal and other companies using the same affiliate model followed within weeks.

Hudson's central rebuttal concerns what the industry calls "stand-down" policies. Affiliate networks require browser-based tools to stand down — meaning not overwrite existing tracking cookies — when a user has already clicked an influencer's affiliate link. This is a network-level rule, not something Honey enforced unilaterally. Hudson argues the alleged cookie-stealing behavior, while not impossible in edge cases, was presented as routine when it was narrow.

The specific Newegg example featured in the video is, Hudson believes, a case where Honey's stand-down detection failed to recognize a link from Howl, a multi-touch attribution platform Newegg uses that differs from standard Rakuten affiliate network links. Howl's system is designed to pay both the upstream creator and Honey simultaneously — the opposite of the zero-sum theft the video described. Hudson is careful to flag this is his inference, not information from PayPal, with whom he says he has had no contact.

He also points to what he describes as a more straightforward problem with the video: on-screen evidence that contradicted the narration. In one sequence, the video claimed Honey was hiding a secret 20% coupon and only surfacing a 5% one; the screen showed Honey returning a 10% coupon plus 5% cashback. In another, a "hidden" 30% code turned out to be a single-use, email-signup-triggered code that appeared on the same retailer page — not a code Honey had any access to or obligation to surface.

Google updating its Chrome Store policies in early March 2025 triggered another wave of press coverage. Hudson argues those policy changes had no practical effect because Honey and comparable tools were already compliant.

He posted a detailed rebuttal on Reddit as an AMA, then distilled the visual evidence into a Twitter thread, acknowledging his platform is nowhere near the original video's reach.

Why browser extensions stay a small category

Hudson traces the limited number of large browser extension businesses to a Google policy requiring each extension to serve a single purpose. That rule, intended to curb abuse, effectively severed the utility layer from any viable monetization layer. The surviving scaled examples are Honey-style shopping tools, Grammarly, and free ad blockers — categories where either the business model attached naturally to a single function or the product could sustain itself on freemium SaaS.

Pi

Hudson's current company is Pi, an ad blocker built around consumer control rather than blanket ad suppression. The product lets users set granular preferences over what ad formats and categories they will tolerate, and is building mechanisms for users to participate economically in that exchange. Pi has 2 million users, acquired almost entirely through YouTube advertising — an irony Hudson acknowledges openly. He has personally funded the company and has not raised venture capital. Pi has done no press.