Referly (YC S12) Raises $1M To Bring Affiliate Commerce To Everyone(techcrunch.com)
techcrunch.com
Referly (YC S12) Raises $1M To Bring Affiliate Commerce To Everyone
http://techcrunch.com/2012/10/15/referly-1m/
10 comments
I simply do not understand the point of Refer.ly . What problem are they trying to solve? Sure, there'll be a lot of people who will spam refer.ly links all over the internet, but you don't get far with that. Unless, they pivot into something else, I don't see why they should succeed.
It's ok, it isn't meant for you.
I also didn't get it, and I worked very closely with Danielle for a long time at Twilio. Then one day my sister-in-law who writes a blog about her hobby farm and Etsy business IMed me and asked "how do I make money from my blog?" She's tech savvy, but the idea of an affiliate network is outside her realm of understanding. I sent her to refer.ly and she instantly got it. That's the sweet spot. It's not me or you.
I also didn't get it, and I worked very closely with Danielle for a long time at Twilio. Then one day my sister-in-law who writes a blog about her hobby farm and Etsy business IMed me and asked "how do I make money from my blog?" She's tech savvy, but the idea of an affiliate network is outside her realm of understanding. I sent her to refer.ly and she instantly got it. That's the sweet spot. It's not me or you.
The big affiliate networks are also typically not friendly to small-time sites joining at all. I run a site with relatively low traffic, and most of my requests to join programs on Commission Junction or Google Affiliate Network get rejected, I'm guessing because I'm not big enough and/or don't have enough track record.
Amazon is one exception where joining Amazon's affiliate program is probably no harder than joining refer.ly, though.
Amazon is one exception where joining Amazon's affiliate program is probably no harder than joining refer.ly, though.
This. I constantly wonder this when I see these companies.
Dan Siroker of Optimizely mentioned something interesting in a talk he gave at Rock Health. Before he founded Optimizely, he and his co-founders tried to reward people who could convert their Twitter followers in a similar fashion. He concluded that "we couldn't pay people enough to spam their friends."
I worked for a startup that was essentially trying this same thing. It became clear, pretty quickly, that we also couldn't pay people enough to make them spam their friends with deals.
Referly seems to be making a name for themselves, so I'm curious how they turn out.
Dan Siroker of Optimizely mentioned something interesting in a talk he gave at Rock Health. Before he founded Optimizely, he and his co-founders tried to reward people who could convert their Twitter followers in a similar fashion. He concluded that "we couldn't pay people enough to spam their friends."
I worked for a startup that was essentially trying this same thing. It became clear, pretty quickly, that we also couldn't pay people enough to make them spam their friends with deals.
Referly seems to be making a name for themselves, so I'm curious how they turn out.
We're certainly not fans of spam. But a well timed recommendation of something I actually might want to buy, from person I know, at a time when I'm ready to make the purchase has a great chance of converting. You don't have to send tons of links (in fact that really doesn't work, people just unfriend you) - you need to send the right link at the right time.
I've been obsessed with the concept of perfect information applied to the web since I worked on Whrrl several years ago. http://en.wikipedia.org/wiki/Perfect_information
The reality is that there are huge existing businesses with names you recognize like Mary Kay and Tupperware who take advantage of the power of friends selling to friends, but with them you are limited to their inventory, you pay an upfront cost (buying samples and baseline inventory), and a lot of labor/time to make a sale. The goal with Referly is to broaden the products you refer, eliminate up front expenses, and reduce the amount of effort to generate a sale. This might not be for the HN audience, who can make $100/hour coding, but for a stay-at-home Mom who blogs and sells stuff on Etsy Referly is a great option for additional income. It's also great for anyone who has every written a blog post listing their top 10 book recommendations.
As to why you should use us rather than your own Amazon tag - we get a better commission rate because we have economy of scale. And you can refer products from any of these websites http://refer.ly/merchants
I've been obsessed with the concept of perfect information applied to the web since I worked on Whrrl several years ago. http://en.wikipedia.org/wiki/Perfect_information
The reality is that there are huge existing businesses with names you recognize like Mary Kay and Tupperware who take advantage of the power of friends selling to friends, but with them you are limited to their inventory, you pay an upfront cost (buying samples and baseline inventory), and a lot of labor/time to make a sale. The goal with Referly is to broaden the products you refer, eliminate up front expenses, and reduce the amount of effort to generate a sale. This might not be for the HN audience, who can make $100/hour coding, but for a stay-at-home Mom who blogs and sells stuff on Etsy Referly is a great option for additional income. It's also great for anyone who has every written a blog post listing their top 10 book recommendations.
As to why you should use us rather than your own Amazon tag - we get a better commission rate because we have economy of scale. And you can refer products from any of these websites http://refer.ly/merchants
> power of friends selling to friends
That's one of the reasons I will never buy any product of theirs. You don't get to me through my friends. I consider abusing private friendships for commercial gain un-ethical.
That's one of the reasons I will never buy any product of theirs. You don't get to me through my friends. I consider abusing private friendships for commercial gain un-ethical.
Speaking of using amazon, how are are you able to offer "cashback" or incentives through them, isn't that against the terms of Amazon's affiliate program?
biz dev, dear growth hacker.
Perfect Information is a misnomer, because even when people have perfect information they cannot be expected to act rationally.
Mary Kay and Tupperware tapped into the western womans' need to meet in person and converse with friends. Referly is trying to tap into the broadcasting phenomenon, or "bragging", that occurs over social networks, which in this instance translates to spam.
Mary Kay and Tupperware tapped into the western womans' need to meet in person and converse with friends. Referly is trying to tap into the broadcasting phenomenon, or "bragging", that occurs over social networks, which in this instance translates to spam.
The information is perfect, not the person. It increases the expected value of an interaction, but doesn't guarantee it (free will and all that).
>we couldn't pay people enough to spam their friends.
This is exactly the flaw that I see with Referly.
Not just with friends - you're diluting the quality of you communications when you become an advertiser, and in order to make it worth your time you're going to have to spam.
This is exactly the flaw that I see with Referly.
Not just with friends - you're diluting the quality of you communications when you become an advertiser, and in order to make it worth your time you're going to have to spam.
I see them as a competitor to Commission Junction, Linkshare, and ShareaSale. The big old affiliate networks with interfaces and customer service that make me gauge my eyes out. We're looking at using Refer.ly to handle our affiliate program because: #1. It's free for merchants right now (though I'm sure that will change) and #2. I like my eyes.
Hey Scott thank you - email me danielle at refer.ly and I'll help you get things going
Agreed. I don't see any logical way how this can scale and can fend itself against being gamed.
(note - that doesn't mean they can't make money. Looks like a pump-n-dump to me)
(note - that doesn't mean they can't make money. Looks like a pump-n-dump to me)
Refer.ly itself won't be able to be "gamed", they will only pay out a commission for a made sale, so there is no risk to them. Are you talking about someone "gaming" other user's links and replacing the original placer's tracking id with the gamer's?
The Amazon problem could be harder to manage as they scale since they can't do subid tracking per user and probably try and correlate redirects to specific Amazon purchases, but that is going to leave a lot of grey area for any other purchases the user should be credited for but turns out to be too difficult to correlate.
The Amazon problem could be harder to manage as they scale since they can't do subid tracking per user and probably try and correlate redirects to specific Amazon purchases, but that is going to leave a lot of grey area for any other purchases the user should be credited for but turns out to be too difficult to correlate.
Knowing who is involved, I think that is unfairly negative.
When someone "games" a system to any major extent, the tracking data would expose that users "gaming" attempt.
When someone "games" a system to any major extent, the tracking data would expose that users "gaming" attempt.
If people can successfully "game" Referly we'd probably try to hire them.
Sorry, I should have clarified. First, your site is brilliant in that it captures something that happens ALL THE TIME; people referring products to their friends. It's arguably the best way to push product in today's global web-based market. But there's an underlying problem; you've now are converting people's value of sharing into money. Once this catches on and gains real customer acquisition power, you know someone with a bigger wallet will be all over this trying to push their product. So, then at some point, my "friend" recommends a product/service, but I notice their getting a cut of the action. What are their real intentions? Is this something they genuinely are recommending?
Additionally, since you take no cut of the affiliate payment, I'm trying to find out who you're actual customer is?
Additionally, since you take no cut of the affiliate payment, I'm trying to find out who you're actual customer is?
I don't really care about the referral money, but would like to share specific products I love with other people. Tools to track how many people buy based on my rec is my main interest in refer.ly, although what I'd really like is a way to see which of my actual friends are buying what.
IMO, Steam does this better than anyone. I wish there were Steam for real world products, including sharing post purchase use and satisfaction.
IMO, Steam does this better than anyone. I wish there were Steam for real world products, including sharing post purchase use and satisfaction.
Bizspeaking.com is the platform designed to enable everybody share and promote great products, you can think of it as the Reddit for products.
We are still pretty new but are rising fast. Please drop by and email your suggestions to info[at]bizspeaking.com
We are still pretty new but are rising fast. Please drop by and email your suggestions to info[at]bizspeaking.com
Interesting!
I wish you had some way to do demo targeting on first use even before signup. When I first visit the site, I see a lot of stuff I'd pay to not have. (Kitschy junk...maybe due to Etsy partnership?).
At the very least, I'd show 2-3 really diverse sets of items on the first page for non-logged-in non-cookied users. Maybe your market is basically 50-70 year old females right now, and so it's worth not making the initial set of items appealing to anyone else. I would hand-curate the front page rather than letting it be what appears to be driven by users, but keep it somewhat up to date with what's popular on the site. The first page view should be beautiful and compelling.
I wish you had some way to do demo targeting on first use even before signup. When I first visit the site, I see a lot of stuff I'd pay to not have. (Kitschy junk...maybe due to Etsy partnership?).
At the very least, I'd show 2-3 really diverse sets of items on the first page for non-logged-in non-cookied users. Maybe your market is basically 50-70 year old females right now, and so it's worth not making the initial set of items appealing to anyone else. I would hand-curate the front page rather than letting it be what appears to be driven by users, but keep it somewhat up to date with what's popular on the site. The first page view should be beautiful and compelling.
Great suggestion.
There is actually a list of filter keyword links right above the products. Those are the sample keywords that I want to prime my users, actually with "laptop" as the last keyword. Though I do know it's not obvious enough to most visitors.
The dilemma is if I start to promote things that _you_ care about, my existing users will feel that I'm turning my back on them and quickly drop off.
Geez, I wish I were Pinterest that only needs to serve 50-70 year old females forever :-P
There is actually a list of filter keyword links right above the products. Those are the sample keywords that I want to prime my users, actually with "laptop" as the last keyword. Though I do know it's not obvious enough to most visitors.
The dilemma is if I start to promote things that _you_ care about, my existing users will feel that I'm turning my back on them and quickly drop off.
Geez, I wish I were Pinterest that only needs to serve 50-70 year old females forever :-P
Many people here don't understand refer.ly because they aren't the target audience.
Referly is all about getting influencers and trendsetters paid. Thats it. Existing affiliate programs are broken and a UX that caters to that category is important for adoption. Its as simple as that.
Its current phase is only to build out the product and get their name out there to the smaller influencers from bloggers to those with relatively small following. The real money will come in when you start seeing Shaq's tweets with referly links.
Referly is all about getting influencers and trendsetters paid. Thats it. Existing affiliate programs are broken and a UX that caters to that category is important for adoption. Its as simple as that.
Its current phase is only to build out the product and get their name out there to the smaller influencers from bloggers to those with relatively small following. The real money will come in when you start seeing Shaq's tweets with referly links.
> Existing affiliate programs are broken and a UX that caters to that category is important for adoption.
But if they pass 100% commission to the affiliate, who is their customer then?
> The real money will come in when you start seeing Shaq's tweets with referly links.
Why would Shaq replace generating referral links with a guaranteed salary from Adidas. Let's say Shaq gets x% for every shoe he successfully refers. All of the sudden, you start noticing that after every game, Shaq sends a tweet "Great game tonight, all thanks to my new Adidas <Insert Cool Shoe Name>"...Every...single...game. Do you think his fans are going to appreciate that?
Also, a lot of athletes and high profile personalities act like CEO's for their brand. They simply hire a head of sales (usually a PR person and/or agent) and say "make me money". They can't be bothered because it's not their core competency to negotiate their worth.
Note - I realize Shaq doesn't play anymore and isn't sponsored by Adidas.
But if they pass 100% commission to the affiliate, who is their customer then?
> The real money will come in when you start seeing Shaq's tweets with referly links.
Why would Shaq replace generating referral links with a guaranteed salary from Adidas. Let's say Shaq gets x% for every shoe he successfully refers. All of the sudden, you start noticing that after every game, Shaq sends a tweet "Great game tonight, all thanks to my new Adidas <Insert Cool Shoe Name>"...Every...single...game. Do you think his fans are going to appreciate that?
Also, a lot of athletes and high profile personalities act like CEO's for their brand. They simply hire a head of sales (usually a PR person and/or agent) and say "make me money". They can't be bothered because it's not their core competency to negotiate their worth.
Note - I realize Shaq doesn't play anymore and isn't sponsored by Adidas.
I can understand their product idea. I think it is little weird. If I want to buy something I will go to amazon or just search on google. They are expecting us to follow one more channel of data source. The biggest challenge for their users will be to get traffic to their pages for which I think they will spam facebook's newsfeed. I heard facebook has done some changes to their graph api to block similar type of spammers. If they (referly) are still successfully able to spam FB then they will become a trending app like a video stream app which was sold for about $200-$250 million few months ago. It does not look like they will able to put a serious dent in the online commerce business. This will be their story.
An idea similar to this was also started by designer of pinterest (I guess his name is sahil). The tag line was - if you can share something then you should be able to sell it. I am not sure what happened to that.
An idea similar to this was also started by designer of pinterest (I guess his name is sahil). The tag line was - if you can share something then you should be able to sell it. I am not sure what happened to that.
You're referring to https://gumroad.com/, which is as simple as you describe but much more elegant than you suggest.
I'm curious as to how Referly is able to link commissions off of Amazon purchases to their users. AFAIK, Amazon doesn't let you do sub-id tracking, only site-wide affiliate tracking (amazon.com/123/?tag=referly-20)
Currently they do not have a solution for this. Luckily it is easy to detect people gaming the system and I believe they handle collisions by hand at the moment. I can only assume this money will help them build a proper solution to this problem.
If you mean by "gaming the system" that people put their own referrer tag in the link, I agree.
But I'd game the system by spamming the whole service and recommend as many products as possible.
To be honest, I don't believe that refer.ly will succeed. It adds a layer of complexity to the end user. If I recommend a product, I just write a simple email to the persom I'm recommending to. If I recommend a product on my website, I just write about it or use affiliate marketing (e. g. my own Amazon tag). What would I need refer.ly for?
A couple years ago, I've seen a startup called loved.by (google it) which was the exact same thing. It seems that the pivoted now to a more generic affiliate marketing platform.
But I'd game the system by spamming the whole service and recommend as many products as possible.
To be honest, I don't believe that refer.ly will succeed. It adds a layer of complexity to the end user. If I recommend a product, I just write a simple email to the persom I'm recommending to. If I recommend a product on my website, I just write about it or use affiliate marketing (e. g. my own Amazon tag). What would I need refer.ly for?
A couple years ago, I've seen a startup called loved.by (google it) which was the exact same thing. It seems that the pivoted now to a more generic affiliate marketing platform.
Thanks for mentioning loved.by. I had never heard of them. AFAIK the Referly team started working on the idea about two years ago about when loved.by first debuted.
I think Refer.ly could work if they add enough value to the end user by aggregating every imaginable affiliate service into one and offering some sort of easy to understand and consistent metrics across all of them.
I think Refer.ly could work if they add enough value to the end user by aggregating every imaginable affiliate service into one and offering some sort of easy to understand and consistent metrics across all of them.
An aggregator could work, but you're at the mercy of the big affiliates from which you need buy-in - and from what it sounds like Amazon isn't playing with them.
All it takes is a cease and desist letter, a la craigslist and padmapper, and you've lost a large portion of your market.
All it takes is a cease and desist letter, a la craigslist and padmapper, and you've lost a large portion of your market.
The code to do this is on Github (at least for the UK): https://github.com/fubralimited/php-oara Affiliate network integration is not a technical challenge at all.
I'm also sceptical. It's hard enough to get consumers to understand and bother with the affiliate model when they could earn pounds (http://www.quidco.com/), let alone pennies (refer.ly). I suspect they'll pivot (either towards Shopcade or towards Skimlinks) within 12 months.
Referly strips out other referrer tags, and we use several approaches to handle "gaming". These are issues that every affiliate network faces, but they can be managed.
how are you able to track what people purchase then?
My evidence would suggest that they guess.
You'd be surprised at the level of data the affiliate networks make available to the people using them. Even if you are a small affiliate, purchase/basket level data is on offer.
how could they build a business off of guessing if the purchases are made. especially with the 24 hour length of the cookie, it would make it nearly impossible to track if multiple referly users have the same items. they must have some arrangement or something going on that is not clear.
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I am also curious as to how they are able to get around Amazon's affiliate agreement.
"You will not offer any person or entity any consideration or incentive (including any money, rebate, discount, points, donation to charity or other organization, or other benefit) for using Special Links (e.g., by implementing any “rewards” or loyalty program that incentivizes persons or entities to visit the Amazon Site via your Special Links)."
Refer.ly clearly violates this.
"You will not offer any person or entity any consideration or incentive (including any money, rebate, discount, points, donation to charity or other organization, or other benefit) for using Special Links (e.g., by implementing any “rewards” or loyalty program that incentivizes persons or entities to visit the Amazon Site via your Special Links)."
Refer.ly clearly violates this.
They may not be worried about getting around Amazon's TOS.
Purely hypothetical but a potential strategy could be to ignore Amazon's TOS in the early stage and use their breadth of products to entice new users and build critical mass. Soon they get to be big enough that Amazon take's notice and cuts them off. However by that time they have enough momentum and users that they can keep their users happy by offering all the products available through CJ, LinkShare, Share-a-Sale, and their own in house sourced affiliate partners.
Purely hypothetical but a potential strategy could be to ignore Amazon's TOS in the early stage and use their breadth of products to entice new users and build critical mass. Soon they get to be big enough that Amazon take's notice and cuts them off. However by that time they have enough momentum and users that they can keep their users happy by offering all the products available through CJ, LinkShare, Share-a-Sale, and their own in house sourced affiliate partners.
The option of being able to donate one's commission is a nice USP. Many people would feel 'guilty' sending links for which they are monetarily compensated. So being able to send a referral link saying, "hey check out xyz, it's cool. And if you buy a portion of the proceeds is donated to charity". This removes what would be seen as a biased ulterior motive...
One suggestion I have for Refer.ly is that to create JavaScript that automatically convert links to affiliated-links for site owners. This simplifies the process of creating a link on Refer.ly, copy and paste it on a site they own. They can just embed the script and it should do all the work for them.
We have an API for creating links: http://refer.ly/api/docs/links
They aren't the same thing.
I wrote the code to do this if you want to buy it.
I wrote the code to do this if you want to buy it.
Thanks, I have also written the code to do it, too, and it is not very hard - but I'd suggest you sell it to other people who don't know how. There are entire businesses to be built on top of the Referly API and right now we are leaving this particular one to developers to build.
I had briefly interacted with referly to see if we can use their service for our business, where they will run the promotion of incentivizing our early customers. Their ToC spooked me away. They will get to keep the email of our customers, but they do not assure that these emails will not be used for their own marketing purposes.
Sorry to hear that spooked you, we keep the email address of the user for two purposes 1) it is the unique identifier of a referral 2) so we communicate with them to pay their rewards. I'll take a look and see what we can do to make it more clear that we're not marketing to these folks.
Congrats @dmor, keep up the good work!
Sounds like a fun challenge, but please fix that atrocious UI!
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