

Referly (YC S12) Raises $1M To Bring Affiliate Commerce To Everyone - dmor
http://techcrunch.com/2012/10/15/referly-1m/

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chinmoy
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.

~~~
slap_shot
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.

~~~
dmor
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>

~~~
GrowthHacker
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?

~~~
dmor
biz dev, dear growth hacker.

------
mhashim
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.

~~~
mbesto
> _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.

------
mandeepj
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.

~~~
subpixel
You're referring to <https://gumroad.com/>, which is as simple as you describe
but much more elegant than you suggest.

------
abailin
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)

~~~
symlinkr
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.

~~~
WA
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.

~~~
truebecomefalse
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.

~~~
bduerst
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.

------
charleshaanel
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...

------
wave
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.

~~~
dmor
We have an API for creating links: <http://refer.ly/api/docs/links>

~~~
workhorse
They aren't the same thing.

I wrote the code to do this if you want to buy it.

~~~
dmor
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.

------
obrigado
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.

~~~
dmor
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.

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matznerd
Congrats @dmor, keep up the good work!

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letthemeatcake
Sounds like a fun challenge, but please fix that atrocious UI!

