Leave a comment

Lots has been written about Dropbox's referral program, yet not many people seem to talk very much about the referral program that inspired it: PayPal's.

I went trawling around the Internet looking for everything that's ever been said about PayPal's referral program- interviews with Peter Thiel, Elon Musk, David Sacks and others. Quora questions and answers from people who witnessed the whole thing.

Here's all of that information, presented in an orderly fashion for your perusal. I've listed out all the sources so you can look through them yourself! I spent hours trawling through everything so that nobody else will ever have to. :-)

The short answer is: PayPal used to literally pay people to refer their friends. They'd deposit money directly into people's PayPal's accounts, and you could literally withdraw the money and spend it if you wanted to. And that was worth the ROI for PayPal. (They reduced the incentives and made it harder over time as they

The important point to note is, of course, that PayPal raised a lot of money and were burning it at an incredible rate. As Peter Thiel said:
 It felt like things were working and not working at the same time; 7 to 10% daily growth and 100 million users was good. No revenues and an exponentially growing cost structure were not. Things felt a little unstable. PayPal needed buzz so it could raise more capital and continue on. (Ultimately, this worked out. That does not mean it’s the best way to run a company. Indeed, it probably isn’t.)”

  • VV

    Visakan Veerasamy

    over 6 years ago #

    I personally enjoyed looking through all of the information. 7-10% DAILY growth. How business development didn't work for PayPal because the banks, etc weren't interested...

    but the single most interested nugget of information was that Elon Musk was the one to come up with the referral program idea altogether. I wonder why nobody seems to mention that these days? Seems like it ought to be in the Growth Hack Hall Of Fame, to me!

  • ET

    Everette Taylor

    over 6 years ago #

    @visakanv Really appreciate you as a member on GH and the great comments you share but this is the 5th straight post from Referral Candy that you've submitted.

    Please post other content from around the web and not just content of your own. Thanks Visakan!