Getting users to sign up for your startup is really hard. That’s why young companies often create promo codes to entice users to recruit friends in return for free cash or credits.
While we’ve all heard stories of that one person racking up thousands of dollars in referral credits for startups like Uber and Lyft, there haven’t been many businesses focused on generating revenue solely by sharing other startup’s promo codes.
Meet PromoAffiliates, a company that runs in-person and online marketing campaigns for startup like Postmates, Lyft, and a ton of other on-demand startups. The LA-based company has acquired over 100,000 users for Uber and Lyft, with over 30,000 users for Lyft in one month alone.
The company started when founder and CEO Aaron Leupp was trying to transport people to a nightlife event he was promoting for. He gave guests his personal Uber promo code, and soon realized that he could make more money promoting for startups than for bars and clubs.
After a few months of using his personal referral codes to sign up users, Leupp decided to reach out directly to the startups, asking if they would pay him in cash instead of credits. The rest is history, and today PromoAffiliates has used its network of a few thousand recruiters (whom it takes a ~20 percent cut from) to send hundreds of thousands of users to over dozens of different startups.
Interestingly, the company works with startups to adjust promotional bonuses in times of severe demand/supply imbalance. For example, Lyft recently offered Leupp’s company a 48 hour window during which they would pay $1000 for every new driver referral, with the new driver also receiving $1000.
When asked what Leupp thinks about the stigma traditionally associated with sharing promo codes, he admitted that while some look down on the act, at the end of the day everyone is happy – the startup gets a new user, the user gets a great first-time promo code, and Leupp and his recruiters get paid.