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I too am keen on both parties getting something, it just makes so much sense. What do you think about the possible downsides of a two sided incentive? For exam

I too am keen on both parties getting something, it just makes so much sense. What do you think about the possible downsides of a two sided incentive? For example new users _always_ signing up with a referrer. In Dropbox's case the reward is 250MB capped at 8GB, but if the same thing applied to the linode model of dollars in credit, it could spell trouble.

shadowpwner 16y ago
How's that a downside? I believe some websites make signing up invite only. See Lockerz, Squarespace(?), Jackthreads, etc.
davidcuddeback 16y ago
In the Linode model, the user must keep their Linode instance for at least 90 days to get the $20 credit. Since the cheapest Linode plan is $20/mo, that means Linode makes at least $40 per referral. Even if that was a 2-sided incentive (the referred user gets a free month too), Linode makes at least $20 per referral (minus costs, so you have to watch your margins).
asdf333 16y ago
Its not a downside as much as just something to think about, but: In a double sided referral (especially when giving money) you are splitting the discount between two people. This can mean that the new customer gets less of a discount. If you have $10 to acquire each new customer, you have one option where you say "$10 off for new customers!" and hope people see it, or you split that amount "$5 off for both of you if your friends sign up". The benefit of the latter is that you are essentially offering a deal to get high quality referalls. However, you might be offering less to the end customer. The genius of giving away product like dropbox has (or giving store credit) is that the cost to you is alot lower so you can give away more for double ended referrals. Then, everyone wins. The deal is better, both parties get the deal, and the company is happy. We think its a really interesting problem area that we're trying to solve.

shadowpwner 16y ago

How's that a downside? I believe some websites make signing up invite only. See Lockerz, Squarespace(?), Jackthreads, etc.

davidcuddeback 16y ago

In the Linode model, the user must keep their Linode instance for at least 90 days to get the $20 credit. Since the cheapest Linode plan is $20/mo, that means Linode makes at least $40 per referral. Even if that was a 2-sided incentive (the referred user gets a free month too), Linode makes at least $20 per referral (minus costs, so you have to watch your margins).

asdf333 16y ago

Its not a downside as much as just something to think about, but: In a double sided referral (especially when giving money) you are splitting the discount between two people. This can mean that the new customer gets less of a discount. If you have $10 to acquire each new customer, you have one option where you say "$10 off for new customers!" and hope people see it, or you split that amount "$5 off for both of you if your friends sign up". The benefit of the latter is that you are essentially offering a deal to get high quality referalls. However, you might be offering less to the end customer. The genius of giving away product like dropbox has (or giving store credit) is that the cost to you is alot lower so you can give away more for double ended referrals. Then, everyone wins. The deal is better, both parties get the deal, and the company is happy. We think its a really interesting problem area that we're trying to solve.