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The $18,000 Referral Hack That Made One Man A Multi-Millionaire
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Startup Spells 🪄
November 13, 2024
The $18,000 Referral Hack That Made One Man A Multi-Millionaire
Eric Martin, a 28-year-old IT worker from York, Pennsylvania, found an incredible opportunity in a place he least expected: a magazine article.
Jet.com: A Startup with Big Promises
In January 2015, Eric spotted an article about Jet.com in his father's Bloomberg Businessweek magazine. Jet.com, a new online shopping startup, promised lower prices than Amazon.
The company ran a contest - whoever got the most people to sign up for their "Insider" program would win 100,000 shares of stock, with the next 9 top referrers receiving 10,000 shares each.
Jet.com launched the contest on November 2014 and Eric spotted it in January 2015.
He initially dismisses his chances of winning, as the contest is already several weeks in. But he did some quick math and noticed that very few people were actively competing.
Martin noticed that referring a few family members causes his ranking on the contest leaderboard to jump significantly.
He used a 30-day free trial of a statistics app that he downloaded to calculate that he might be able to win the contest with just 2,000 referrals.
Earlier, he had ran for congress so he knew how to reach people. He tried Facebook ads first, but they didn't work well.
He considered using Google ads but found that other contest participants were already using them.
Customer Acquisition Strategy
Then he found his secret weapon: he began investing in paid campaigns on "rewarded advertising" sites like Swagbucks and Gifthulk.
Sites like this have one of their most important demographics as mothers who will do a survey in exchange for a 1-month trial of cosmetics.
These sites pay users small rewards for completing tasks online.
Eric spent $3,000 on Swagbucks to get his first 2,000 sign-ups, putting him in 7th place.
He faced a choice:
Stay in the top 10 and win 10,000 shares
Spend more money to aim for first place and 100,000 shares
He could probably have spent $3,000 or so and gotten into the top ten but the difference between 10,000 and 100,000 shares was pretty big.
Eric learned that the first-place insider had generated more than 4,000 sign-ups so he chose to go big.
Eric went all-in with his strategy. He invested his entire tax refund and more, totaling $18,000. He carefully watched the leaderboard each day while running non-stop campaigns on reward sites.
His dedication paid off as he surpassed thousands of other competitors, ultimately winning the contest with an impressive 8,167 referrals.
In August 2016, Walmart bought Jet.com for $3.3 billion. Eric's prize shares turned into $20 million in cash.
Eric's story shows that sometimes taking calculated risks can lead to extraordinary rewards. He spotted an opportunity, did his research, and committed fully to the plan while making life-changing money.
He turned $18,000 into $20 million and all it took for him was 1 month.
Top Tweets of the day
1/
Human behavior is generally very predictable because once people behave in a certain way, they just need enough justification to do it again.
This applies to all human behavior, from personal to business.
So, the two most important questions in marketing are:
1. How do you get… x.com/i/web/status/1…
— Alen Sultanic (@IAmAlenSultanic)
1:29 PM • Oct 5, 2024
People who get hooked into the Apple ecosystem... keep buying Apple products.
Once someone buys an iPhone, they prefer to buy a new one every year if money is not a problem.
Once a buyer, always a buyer.
2/
I stayed out of all the drama during the last 3 years (Vercel, GoDaddy, WordPress, AWS, Lemon Squeezy).
How?
By always using the 2nd cheapest and 2nd most popular option. Done!
— Lukas Hermann (@_lhermann)
5:27 PM • Oct 14, 2024
If it is free, then choose the most popular one. Like React instead of Vue. Both are JavaScript Frameworks used in programming. Why? Because you get a bigger ecosystem of libraries & packages and massive support via AI tooling.
If it is paid, then choose the 2nd most popular one. Like Windows vs Apple. Or Hetzner vs Vercel. Or Gitlab vs Github.
This allows you to save a lot of money. Most popular thing charges on its brand value so they price out of the market. Buy the most popular options when you are wealthy. Till then, go with the 2nd most popular ones. I’ve read this in a certain female subreddit that some women buy cheap purses for $500 that are similar to $5,000 branded ones to keep their social status among their group while not wasting money. Pretty smart I would say.
Sidenote: Apple seems like a good option until it goes to the service center. This might be location-dependent but personal experience has been terrible.
3/
Quick Conversion Tip
Make sure you test your offer’s price.
It’s one of the biggest needle movers after the headline.
(And you can also test offering payment plans.)
— Andrew Gould (@AndrewWriteCopy)
8:00 PM • Oct 17, 2024
You can charge $500 but if only 100 people buy it, then you only make $50,000.
But if you charge $50 and get 10,000 people to buy it, then you make $500,000.
It suddenly becomes 10x more money.
The people who charge more have built brands for decades. Nike, Apple, and Hormozi can get away by charging $5,000+ per product. You can't.
Remember, there are 3 levels of customers.
Rabbit Holes
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