Seth Priebatsch, a lanky 22-year-old in a fireball-orange polo with matching orange wraparound shades perched on his crown, bounded onto the stage to deliver the first keynote speech at South by Southwest this year. "That was one of the more frightening moments of my life," Priebatsch says. Sure, he was blinded by the glare of stage lighting, but even more nerve-racking was the fact that tens of thousands of people in the audience were wondering "exactly who is this guy?"
Although he was one of the lesser-known speakers in Austin that week, Priebatsch has been attracting worldwide attention since his SXSW talk. At 22 years old, he’s the CEO of Scvngr, Boston-based app-design company that employs 80 people and landed $15 million in investment earlier this year. Its premise is as brash as is Priebatsch’s penchant for wearing tangerine: With location-aware smartphone applications, it seeks to build a super-smart game layer on top of the world.
The company’s first app, Scvngr, is a location-aware scavenger hunt platform that points out, via Google Places, nearby locations to check in, with rewards like badges, or discounts for completing special challenges. For instance, enter the number of wings you can eat at a Buffalo Wild Wings, and earn a free Coke.
This year the company also launched LevelUp, a daily deals app with incentives for repeat purchases at local merchants. The app is like a mobile Groupon, except that it encourages customer loyalty by sending the buyer another, even better, discount for the same merchant after the first deal has been used. LevelUp offers three tiers of deals to repeat customers to turn casual discount-buyers into regulars at the register.
While Scvngr was "killing it,” says Priebatsch, with more than 1.5 million users and hundreds of lucrative brand partnerships, the company was faced with problem it couldn't solve. While it could show detailed social metrics to brand, non-profit, and educational partners running programs through Scvngr, it was weak on cash-register metrics; it couldn't tell how much profit the app was driving.
"We wanted to be able to solve that as well," he says. "So we built a new product with a slightly different user base in small markets, and we are going to innovate rapidly."
So far it's been working. Scvngr is valued at $100 million. While it took the company six months to earn its first million, Priebatsch admits it brought in revenue of $1 million in the first six weeks of 2011 alone. Thirty new employees joined the company in early June; all are older than Priebatsch, who dropped out of Princeton in 2008 to found Scvngr.
"We have a great company culture mainly because I spend as little time leading or managing as possible. I don't really like doing that, so we've hired people who are all entrepreneurs," he says. "We say, 'welcome to Scvngr. You're an entrepreneur. You are building a company.'"