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Ask YC: What do you think of paying a referal fee per new member?

2 points by gommm ↗ HN
I'm currently creating a social networking website and to attract users I was thinking of asking university students to advertise for me and pay them for each new member they refer (around 30 cents per new member).

What do you think of this idea? Did anyone try something similar before? What are the caveats? (of course I will check that members are real members who log in more than only one time and I will monitor ip address to prevent the creation of a lot of accounts..)

Thanks...

5 comments

[ 3.2 ms ] story [ 26.4 ms ] thread
ScottWhigham
I don't think it's a bad idea provided you have enough cash on hand and a good system of only accepting registrations that you want. For $0.30 a registration, someone could easily bot it with fake accounts from all over the world (different IPs, would login multiple times - whatever). It sounds like you want only people with .edu email addresses? Facebook did this initially IIRC.
gommm
Thanks for your answer... So I guess I should put some limits on how much one referal fees for a month and pay only accounts that stay active more than a month...

I hadn't thought about limiting to student email addresses... but that should limit the possibility of fraud. I'm also limiting customers to only one country too (malaysia)...

phil_KartMe
a couple of questions:

target market: do you want university students' friends as your earliest members?

incentives: do you want to pay for referrals or active users (e.g., the friend uploads a pictures, posts a review, etc.)?

gommm
Target market: university students, young professional

In order to create an account one needs to upload a photo at least. I would also probably only pay for accounts that are still active after a 30 days period...

jimrandomh
This is a horrible idea, because it invites abuse. If someone sends spam advertising your site, you'll have to deal with the fallout. You might think that a few simple checks will prevent fake members, but a botnet can create fake members and make them log in as many times as the botnet's controller wants. Can you really afford to police a referral system?