Referly Discontinuing Rewards, Paying Existing Links Through March 31st, 2013 | Hacker News Reader

Referly Discontinuing Rewards, Paying Existing Links Through March 31st, 2013

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51 pointswilfra37 comments

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.

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.

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

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.

You make excellent points. Our existing users signed up to make money, so for them (remember this was an email to our registered user base) paid posts is probably the most valuable thing we can offer. Going forward we probably won't focus on that much as we build our core base of writers, and we are going to have a high editorial bar for paid writers that many of our affiliate contributors - quite honestly - are not going to be able to meet.

I had a life before Referly, a life devoid of affiliate stuff where I was an editor in Chief of a local tech community site [1] - and I'm super excited to be digging up those old skills.

[1] http://www.bizjournals.com/seattle/blog/techflash/2010/01/se...

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?

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.

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.

The posts that have been upvoted a lot here haven't had any affiliate links in them.

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.

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).

Go with a name that will work even if you end up pivoting 10 more times, because you will if your company is still around in 100 years.

Blog post I did on buying premium domains you might find helpful in your search - feel free to email me if you need help: http://franceschine.com/post/19837401405/how-to-buy-domains-...

I suggest "Pivot". Why a startup has not done this already, I have no idea. I will be registering Pivot.ly and Pivot.co shortly.

I could see it working as someone who called themselves something like a product/ market fit or pivot consultant.

You could come in on a big hourly rate and review startups products and the market, advising them whether to continue with the current idea or if not what kind of pivots would best fit the assets and skills they have built up.

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?

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.

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

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.

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

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.

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.

Wont work. Affiliate networks generally do not want that behavior. Mostly its because the advertisers of each offer are specific about who can and cannot promote it. With a reseller, you lose that control.

Affiliate networks would rather keep their advertisers happy (and not lose them, since they are the lifeblood of all networks) vs doubling income and potentially alienating/losing their advertisers.

Also, This is the first I have heard of referly pivoting. I have to say I also vastly prefer the previous business concept to this. However, I am fairly confident that because of how vocal/public the referly founders/team is that they should be able to find a acquihire regardless of what success they see in this direction.

I definitely wouldn't go with a blanket 'wont work' it just wont work for every affiliate program. I've been a reseller for online poker affiliate programs for close to 10 years now and the number of sites that don't allow it is dwarfed by the number of sites that do. And the ones who don't allow it still give you a commission for referring new affiliates.

Basically what happens is that you have to enforce their terms and conditions for them. The incentive is certainly there for you to do this, because it's your affiliate account that is on the line and you are taking responsibility for the actions of anybody using your links.

Subaffiliates are welcome in most affiliate networks. Some individual programs on those networks don't allow them, but the networks typically leave that call to the affiliate managers running the programs.

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.

I look forward to that write-up.

As a person who runs a successful company in the affiliate/consumer space, as well as launched unsuccessful expansion attempts in same, I would be interested in hearing another's take. Yours, in particular, partly because I can almost feel your relief through your writing.

I can say from my own experience that there is something soul-sucking about affiliate marketing and there is a common "feel" to many (not all) of its inhabitants throughout the ecosystem. At times, it seems that a certain sliminess is almost presumed--especially of affiliates. It feels like a race to the bottom, and as a somewhat creative and aspirational person myself, I find it demoralizing and stifling at times.

And as an entrepreneur there is nothing like creating your own product vs. an offering that is primarily designed to promote those of others. With affiliate-based models you may start with the intention and belief that you have a product, but at some point you realize that it is simply another thin promotional veneer, peddling the wares of others and largely at their direction.

I applaud your shift to something that is truly you and look forward to my own shift in the near future. I also congratulate you on failing quickly in the old model, as a moderate degree of success can hold you in limbo for longer than you'd care to consider when you look back on it.

...linked to the appropriate affiliate program.

I think that's the idea behind VigLink:

http://www.viglink.com/

And skimlinks, 123linkit, etc. The basic idea (aggregate affiliate program memberships, have an algorithm to turn site/product mentions into referral links, take a cut of the commission) wasn't new. Referly was more consumer-oriented than publisher-oriented though, IIRC.

http://skimlinks.com/ http://www.123linkit.com/

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!

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.

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

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.

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.

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

their != there.

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