[reynolds]

This seems like a slap in the face of the investors. Giving a chunk of your startup capital to a charity is basically throwing it away. Good for the charity but this startup seems too early stage to be giving that kind of cash away. I hope it pays off for them.

[Jabbles]

I disagree. The article gives the distinct impression that this is a marketing strategy - a very noble one, but I don't see how you could equate this to "throwing it away", as a moment's calculation will tell you it will bring in ~15000 new users.

[reynolds]

You're right. After jumping the gun I realized they're not "giving it to charity", but rather using it to acquire users.

[Jabbles]

I feel inclined to disagree with you again... nothing personal, but I think I should point out that they are "giving it to charity", and using it to acquire users...

[reynolds]

It was just bad wording on my part. What I tried to say was that there's a difference between giving $150k to a charity outright and donating money on behalf of the users who refer more users.

[gridspy]

SwipeGood is hoping that many people will make the same mistake you made. It is a savvy business move that lines up very well with their business model of supporting charities.

[SteliE]

Steli here from SwipeGood! On average our users donate over $20 per month to charity and stay enrolled for a very long time...so this move is a win/win/win. It's great for our users to be able to instantly give away money for charity ; great for our partner charities who receive the donations and good for SwipeGood since it makes economic sense for us :)

Cheers, Steli

[spencerfry]

That doesn't really answer reynolds' question at all.

How is this better than spending $150k on hiring, for example, 2 engineers for a year? Or 1 engineer and 1 designer? Or 1 customer service person, 1 community manager, and 1 developer? Etc.

[SteliE]

Our investors are really happy with us... we are in fact hiring engineers & designers right now as we speak. And this money is accelerating our growth today. Believe me when I tell you that if you can acquire new users for less money than they generate you revenue your investors will be happy to see you invest money this way! Let me know if this answers the question :) Thx, Steli

[ulugbek]

It is better if NGOs are promoting the service to their existing and potential donors. It is possible that revenue from giving away $150,000 with a buzz brings in more users than 2 engineers can.

[reynolds]

That makes sense. At least you guys are using it to get user referrals rather than throwing it in a wheel barrow and burning it :)

[SteliE]

Every user can invite up to 100 people who each get $10 if they sign up (thats a max of $1000 for 100 users). Hope that clarifies it a bit :)

[spencerfry]

Even PayPal with millions in funding only gave away $5/referral. $150,000 there brings you 30,000 users, but "SwipeGood is giving every user who enrolls on the service $1000 that they can give away to charity." That's 150 users or am I missing something?

[reynolds]

It looks like $10/referral up to 100 referrals. If they make $20/user/mo this is a no brainer.

[russell_h]

I think they only get 5% of that $20/user/month. That being said, here are two options for how to use $150,000:

1. Hire an engineer for a year

2. Sign up 15,000 users and generate $15,000/month in revenue. Hire an engineer permanently and net an extra $30,000/year in profit.

I know which I'd choose.