

Referly Discontinuing Rewards, Paying Existing Links Through March 31st, 2013 - wilfra
http://refer.ly/please-read-referly-discontinuing-rewards-paying-existing-links-through-march-31st/c/67f9d3fa890311e2bfbf22000a1db8fa

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smalter
As a causal observer, I think one major weakness of Referly when put up
against its ex-competitors, companies I'd consider to be Pinterest, Wanelo,
The Fancy, Svpply, etc., is that consumer behavior on those sites was driven
by the love of doing that thing--clipping, collecting, and presenting in a
community of peers, whereas Referly was about monetization (baked into the
name "Referly"). In my experience, in life, Referly loses that fight every day
of the week.

I'm afraid the exact same will be true when you put Referly up against Medium,
Svbtle, etc. You can tell on Medium and Svbtle that it's all about the writing
and there's a real passion and community around the written word. If Referly
continues to be about monetization, I think per post vs. affiliate is
irrelevant, and Referly will lose.

A quick scan of the views on their posts suggests that the most popular posts
are written by Danielle and Kevin, and I wouldn't be surprised if they drove
the majority of those views via HN. Danielle seems to have a very strong
personal network and through that she can attract prominent writers to get
this thing kickstarted (like one I see via Francisco Dao). But HN and personal
networks are great to bootstrap a baseline level of activity, but they need to
quickly be leveraged into broader distribution, etc. (eg, it needs to
relatively quickly flip from being Danielle and Kevin posting Referly articles
to HN to randoms posting those articles, otherwise you're not bootstrapping
anymore, you're propping up your traffic).

Danielle and crew seem very tenacious, and I wish them the best.

~~~
wilfra
SeekingAlpha seems to be doing quite well and their content is all driven by
paid user submissions. I've never submitted content, but as a user I love it.
Very high quality articles.

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calinet6
Theory: their userbase is basically focused on monetization, so for them, the
payment-driven model makes a ton of sense.

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wilfra
It's also very valuable traffic to advertisers so they can pay out attractive
rates to writers while also making good money being the middle man.

If Pinterest, Twitter or Tumblr were to adopt this model, it probably wouldn't
be very effective because their traffic is (essentially) worthless on a micro
scale.

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rachelbythebay
Wait, so every time someone posted a referly link to HN that seemed spammy,
it's because it _was_ spammy? That is, they were artificially constructed and
there was money riding on that post getting upvoted?

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citricsquid
The majority of HN submissions that were to a referly link were from the
founders, I assume the sort-of spammy nature is something they're afforded
permission to engage in because they're a part of YC.

~~~
minimaxir
Although, I've usually seen those types articles flagged off the front page,
so it self-corrects. I don't think there's a bias in favor of YC founders.

There's another YC startup whose founders are more blatant, but their spammy
posts are flagged even faster.

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robryan
This pivot puts them in a very crowded market with no shortage of competition
from offshore willing to write articles for low pay. Going that route would
make them a mahalo or demand media type play. Even if they are going the high
quality content route there is lots of competition there and the current
branding is wrong for it.

The original model seemed to be trying to solve a highly scalable technical
problem in providing people with low friction affiliate links, there are other
companies doing this but referrly was probably the most consumer focused.

Scalability of the new model is harder.

~~~
dmor
We are not going the low quality route, we are headed for direct competition
with Medium and blogging networks/platforms like it (we are keeping pace with
them on traffic to our articles and plan to continue doing so). There is an
undeniable groundswell around this kind of company right now, and even
established companies like Quora are starting to offer much better tools for
long-form content. It is going to be very hard, and potentially very
rewarding. This new direction isn't just about pivoting away from something
that didn't work, it is also about doing something we are much more passionate
about.

I absolutely agree that our branding is wrong now, and it is likely to change
but we haven't decided on a new brand yet. It would have been smoother and
more clean PR to annoucne the new brand at the same time as discontinuing
rewards, but I didn't want to wait any longer to let users know about the
changes that were coming.

As to scalability I don't know, maybe it is harder, but it is a fight I am
personally much happier to take on. Filling my day with talking to writers,
readers, and producing/editing/reviewing/reading content to keep the quality
bar high sounds like heaven. I'm so happy not to be carrying this secret
around anymore, and to be working on something I love (again, I really did
love Referly and it was a thesis I held for 4 years so letting go of it isn't
as easy as my email makes it sound).

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mbesto
_This new direction isn't just about pivoting away from something that didn't
work_

Curious to know what exactly didn't work? Sorry if I missed it but did you
guys/girls blog about it specifically anywhere?

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dmor
I am going to blog about it more in depth, but my email to users basically
sums it up - the promise of Referly was "write about products here and you'll
get paid", but a lot of people didn't make money (lack of traffic, no being
able affiliate products they wanted, etc) so we didn't fulfill that promise.
In the process we learned a lot of people wanted to write and drive
significant traffic, but only if they could be paid per post and maintain
church and state between advertising/referrals and content.

I don't have a real company if our brand isn't a promise we can keep. I want
to build that, I won't settle for less.

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itsprofitbaron
I actually like that Referly are 'pivoting' (I really don't like the word
‘pivoting’ mainly because, in terms of startups it’s also been associated to
failure but many of them aren’t failures) into a content model ala. Medium etc
meaning that they’re basically becoming a content network in the sense that
Wordpress and even Tumblr are. Some people may argue that Medium’s strength is
actually its editor tools but they recently hired Evan Hansen (previously a
long-time editor at Wired) [1] which suggests that they’re going to end up as
a Content Network. Anyway, the reason I like it is because, it seemed (from an
outsiders perspective anyway) that Referly wanted to be like this initially
(user profiles showing the stuff users shared and some posts on there too)
although they were lured by the idea of turning links into $ ala.
Skimlinks[2], Viglink[3], YieldKit[4] which resulted in a hybrid – which
didn’t really make sense, in the sense that Publishers (the ones Referly would
really make the $$ off) already have their own websites etc that they want to
monetize.

It’s an interesting play that they’re taking but if they roll out a nice new
brand (which really needs to be .com as I don’t think Refer.ly is the best
name for this going forward) then they can definitely win big in this space.
Likewise, I don’t think this space they’re going into is going to be a ‘winner
takes all’ market as we have already seen there are several winners even
within the same verticals in the content space. So if Referly or whatever
their new brand will be even end up Second, Third or even Fifth etc then
they’ll end up with a decent sized company (there has been plenty nine figure
exits for content companies) although, maybe Referly can become the first one
to achieve that ten figure exit or maybe even IPO.

[1] <https://twitter.com/evanatmedium/status/309802736831041537>

[2] <http://www.skimlinks.com>

[3] <http://www.viglink.com>

[4] <http://www.yieldkit.com>

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arbuge
Affiliate commissions are a small fraction of a purchase price. Around 4%-15%
usually, average 7% in my experience. It's hard to build a business model
where your revenue is a fraction of that fraction.

We tried this ourselves in one of our projects: <http://bvyer.net>. We plan to
keep that one going, since it doesn't cost us much to run, at least so far...
but we certainly learned that it's hard to make any money in this line of
work.

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trotsky
venture backed startup buying low quality content to drive affiliate
purchases?

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wilfra
It's an interesting pivot. Not sure about the domain now, though.

I had signed up for and was excited about them potentially disrupting the
affiliate marketing industry.

~~~
onecaseman
Same. A Twilio-like aggregator for affiliate marketing could have been a
special idea. Content/review sites could just sign up and have any product
they reference from their content linked to the appropriate affiliate program.

They went in a more consumer-focused direction though. I wish them luck.

~~~
dmor
Dan is right, and most affiliate programs we worked with were quite wary of
Referly. I am writing a pretty in-depth piece on the affiliate world, this
model, the potential for someone else to execute well in this space, etc. I
think our consumer-focused approach was pretty unique, and I think it could
still work but is probably better executed as an extension of a business like
Skimlinks (who we use).

To those who feel we have spammed HN with our content/experiments I'm very
sorry, we have used it as a test bed for various types of content written by
ourselves and some of our contributors in order to figure out what HN readers
want. We've got a ton of data on that now, and our focus going forward is on
creating a network of writers focused on high quality content. Some of it will
make sense of HN and end up here, but most probably won't.

~~~
onecaseman
I look forward to that write-up.

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malloreon
It sounds like they're stepping away from being hubpages.com with a product
lean to becoming ehow (demand media) with a product lean.

And evidently it'll look kinda like pinterest based on the layout of the front
page.

Just might work!

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grainawi
This is the tougher route, without question, but I think it's a strong and
bold move. If it's really what you're more passionate about then it's the
right choice. Best of luck.

p.s. the launchgram acquisition makes even more sense now.

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generalpf
Glad to see the Refer.ly circle jerk around here come... full circle.

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codex
I applaud this move. It's difficult, emotionally, to pivot this radically, but
I think in the long term it will be a more rewarding and meaningful route for
the founders.

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eth
I'll be curious to see how the Medium/Svbtle model works the advertising/paid
model introduced on the front end, rather than building critical mass around
great content producers and working it in later on.

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clintboxe
Yay, more crowd-sourced content. Can't wait for the slideshows.

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rasengan
their != there.

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mirrormirror
G

