Referral & Incentive Systems

Referral systems let users bring in other users in exchange for rewards. It's how Dropbox grew to millions of users by offering storage space for invites, how PayPal bootstrapped network effects by paying users to refer friends, and how DoorDash expands to new markets through referral credits.

The core components are: unique referral links (attribution), incentive structures (what users get for referring), fraud detection (preventing self-referrals and gaming), and lifecycle integration (when to prompt referrals). We also build viral loops where both referrer and referee get value, creating compounding growth.

Most referral programs fail because the incentive is too weak (nobody shares for a 10% discount), the ask comes too early (before the user sees product value), or there's no follow-up (users invite friends but nothing happens). We focus on timing, incentive design, and activation of referred users.