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Summary:

I’ve noticed an irritating trend in the startup world: After adding my email to a launch page, I get asked to submit a few of my friends’ email addresses in exchange for a higher place in line or earlier access. It’s annoying, but it apparently works.

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In the last month or so, I’ve noticed an irritating trend in the startup world: After adding my email to a launch page, I get asked to submit a few of my friends’ email addresses in exchange for a higher place in line or earlier access. This has happened at least twice when I’ve checked out a startup after meeting an entrepreneur, and two or three times after I’ve spoken with a friend about a cool company and gone to check it out. I find it annoying, but it’s a trend that has blossomed, mostly because it appears to work.

Damian Kimmelman, founder and CEO of DueDil, a financial information startup that’s shutting down its social invite program as it opens up its beta to more people, said the company saw its invite pool swell by a third thanks to folks sharing email addresses of their friends. But most important was the psychological effect Kimmelman felt it has on the invitees. In an IM conversation, he said it helps prioritize users when you can only let a few people into a beta at one time and he added, “[A]lso you are a free service, but you kinda want people to value the service from day 1.”

He added that it was a short-term thing and only four or five people seemed upset enough to complain about the process.

Apparently, his experience may become the norm. Justin Britten, founder of Prefinery, a company that helps startups manage their beta process, said via email that at this time, 45 of the companies using its software have turned on social invites since the company released the functionality in February. The feature encourages applicants to share news of the beta they just applied to on social networks including Facebook, Twitter, and Reddit. They can also pass a unique link generated for them via email. Britten writes:

In this time, 45 betas have enabled the social sharing feature, and of these 45 betas, a total of 2,125 testers across all 45 betas have shared their unique share link with their friends for a total of 28,214 unique clicks. These same 45 betas had a total of 6,827 testers over this period, meaning that 31% of all testers (2,125 of 6,827) were willing to share the beta with their friends on their social networks! This willingness is huge!!

Of these 28,214 clicks, a total of 789 people actually applied for access to the said beta after clicking on their friend’s unique share link, yielding a conversion rate of approximately 2.8 percent.

This was so successful Prefinery has elected to enable its sharing feature by default; few betas choose to disable the feature, according to Britten. Another way to look at this, however, is that in attempting to beta test an app, the tester is willing to sell out his friends in hopes that almost three people out of every hundred that he or she shares it with will also be interested enough to also try to sign up.

I’m in the cranky camp on this one, but since it’s driving value for entrepreneurs using it, I suppose I should just get used to being asked to fork over my friends in exchange for earlier access to the next hot startup. I don’t have to do it, but I do worry that an increasing part of being an early adopter seems to be a willingness to shill. I’m not ready to live in a world where, as Jeff Hammerbacher, an early Facebook employee and entrepreneur, said in a BusinessWeek article, “The best minds of my generation are thinking about how to make people click ads. That sucks.” This viral world makes me somewhat sick.

  1. “I’m not ready to live in a world where as Jeff Hammerbacher, an early Facebook employee and entrepreneur, said in a BusinessWeek article “The best minds of my generation are thinking about how to make people click ads. “”

    Don’t worry, Stacey, it’s only temporary. As more and more advertiser-supported websites drive the supply of ads to virtually infinity, the price of those ads will decline, and approach zero at some point. This will kill the business model for advertiser-funded web sites, and will drive those “smartest minds” towards trying to figure out a viable model for websites, whether or not they provide a useful function.

    The question I have, is when will the people funding these advertiser-supported websites realize this, and stop inflating their supply?

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  2. I’ve similarly been feeling uncomfortable with it. We ended up not taking that path with the service we’re building. Instead we’ve chosen to just go live, quietly, and see how people respond to what we have on the merits of what it is. No gaming.

    Will be interesting to watch how this evolves and in particular, how conversion rates compare for addresses gathered from people trying to get an invite vs. people invited by those that are loving the service vs. random in-bound traffic.

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  3. I opened the beta for my site on announcement sites like betali.st, which were really handy. Since then I’ve noticed that nearly every site that comes down the pipe on there uses a service like this to manage and promote their beta lists. I just used a google apps form.

    You punch in your email address, then they encourage you to share the url using facebook and twitter. I’m not sure this is a bad thing though… as we do it for page content all the time. I have yet to see any site ask for your friends’ email addresses… which I think would cross the line.

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  4. I’m doing the same with my company as earlier commenter Michael Lewkowitz is with his. It’s mostly because I don’t take the bait myself; I refuse to spam my friends in exchange for an invite to your startup, whose product I haven’t even seen and therefore couldn’t possibly recommend. It’s also partly because outside the strange worlds of San Francisco, Silicon Valley (where I live), and a few other tech hubs, I suspect this kind of thing strikes almost everyone as gimmicky and tacky; it suggests your product is just another piece of hypeware. The people jumping on the spam-your-friends-for-invites bandwagon may know how many people they’re getting, but they don’t know how many people they’re losing; I don’t either, but I’m guessing it’s more than a few.

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  5. I find it annoying when you have to enter your email address on sites in order to leave a comment

    @kenG i love your music, but your point is correct. Unfortunately is seems the smart minds work in fields with the largest opportunity for growth & money. If we take away ad spend/$ what the incentive. roughly quoted after 2 many ginger vodka;s- “a million dollars is cool, but a billion dollars is cooler”

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    1. The smart minds don’t always make the right decisions, especially software engineers, when it comes to figuring out what business models will thrive, or even survive. A lot of people left their careers in the late 90s to join dotcoms, only to see many of them die without a viable business model.

      My point was that there is a limit to how many ad-supported web sites the browsing public can support. If the number of ads (especially when those that never get clicked on, cough, facebook, cough, have to be sold for a tenth of what other sites get to charge) grows by an order of magnitude or two, the amount advertisers will pay for them will drop. And there goes the old business model.

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  6. This is a spammy path.
    The first startups that will use this method will win the extra emails. Later on everyone will spam each other and the user sensitivity to new invitation will decrease. Yielding a tougher environment for new entrepreneurs.

    Is this is what we want?

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