How Andrew Warner built an email list of 23 million subscribers | Hacker News Reader

How Andrew Warner built an email list of 23 million subscribers

startupfreedom.com

61 pointsil17 comments

I'm not sure how to feel about this guy after reading about "grab.com". Not sure how I missed that back in 2000 but apparently Andrew started a company with a "billion dollar prize" from an online lottery. Turns out no one one the billion dollar prize but someone won a million dollars from their random drawing. http://www.allbusiness.com/health-care/health-care-professio...

So naturally I had to look at the odds, and if you pull up grab.com from archive.org you see:

"Billion Dollar Sweepstakes: GRAND PRIZE PAYABLE IN 20 ANNUAL INSTALLMENTS OF US $5,000,000 EACH, FOLLOWED BY 10 ANNUAL INSTALLMENTS OF US $10,000,000 EACH, FOLLOWED BY 9 ANNUAL INSTALLMENTS OF US $20,000,000 EACH, FOLLOWED BY A BALLOON PAYMENT OF US $620,000,000 IN THE 40TH YEAR, WITHOUT INTEREST. ODDS 1:2,404,808,340. NO PURCHASE NECESSARY. WINNER MAY TAKE IMMEDIATE PAYOUT OF US $170,000,000 INSTEAD OF ANNUITY."

So 62% of the payment came 40 years later, otherwise a payout of $170 million. Lame. Yet, I guess enough people were foolish enough to sign up for it...

Very similar to the structure of the Pepsi billion-dollar prize, I think.

http://en.wikipedia.org/wiki/Pepsi_Billion_Dollar_Sweepstake...

Most huge cash prizes are annuitized. I went on Who Wants to Be a Millionaire (airing Wednesday) knowing that even if I answered every question correctly, I would at best be looking at a cash value of under $800,000. It's just the way it works, and it's always spelled out in the official rules.

They must have changed the prize distribution procedure for Who Wants to Be a Millionaire. I was on the show in 2000. They gave us a big speech about how if you win a big prize, they will literally cut you a check for that amount and you should talk to a tax advisor before spending anything. One of their early winners got into some tax trouble. I didn't win anything on the show, but they sent me a check for $400 in January to cover my taxes on the plane tickets and hotel.

Ah, the primetime show with Regis. How many times I played their phone game. I went on the syndicated show, where they got rid of the qualifying round and now award everyone $1,000 even if they answer the first question wrong.

However, they do annuitize the million and half-million dollar prizes and don't pay for your travel expenses (but again, everyone leaves with a $1,000 minimum).

Well you make good points, but paying out 62% on the 40th year only seems a bit extreme, it's not quite an annuity is it if the payments aren't fixed to a certain amount?

Every US lottery I've seen uses the same system. It's not nice, sure, but it's not uncommon. Also, since all the US lotteries use it, I suspect there's a reason. For example, perhaps the underwriters require it. (Or perhaps since they all do it, they all can do it).

Could you point to a US lottery that uses this system? Every system I see does not use this system. They distribute by a normal annuity schedule with a fixed amount each year. http://www.usamega.com/powerball-jackpot-annuity.asp?state=N...

OK, that's what I meant. I presumed the grandfather was complaining about the lottery being split over multiple years rather being awarded all at once (like the UK or Irish lottery for instance).

Indeed. I enjoyed watching his interviews and dug into his background out of curiosity. Totally turned off by him once I read this. Really shady.

There are some takeaways I reckon, but re. the email list it's a defunct model - which I think Andrew says as much.

Opt-in email marketing provides the highest ROI and conversion rate of any online marketing method. Twitter and Facebook may be cool, but the guys sending emails to their lists control the message and are the ones making the big bucks.

I sell about $100 worth of software for every ten people I can convince to click on a link in an email. That number astounds me. I hope to do more with it next year.

I'm getting nearly the same numbers for paid sign-ups; I'm glad I'm not the only one surprised by how effective it is!

To expand, that means that if a user's average lifetime clicks is .5, an email sign up is worth $50 in eventual revenue.

I have worked with clients (retailers) on their numbers and found that a subscription (pen, paper and a person asking a couple of questions) is worth more than a sale.

Its awesome to hear these numbers!

Yeah, it clearly didn't work for Groupon.

I don't know about that...

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