March 9, 2012

SpiderOak scaling back Refer-A-Friend program

by with 21 comments

When we at SpiderOak started our industry leading 50 GB Refer-A-Friend program back in May of 2011, we hoped that it was something that our most dedicated users would see as an opportunity to spread the word about SpiderOak as well as enjoy more usable storage in their account.

The initial response was overwhelmingly positive. While our storage costs increased, it was something we were more than willing to support for the good of the users.

However, along the road we noticed a few alarming trends that have led us to the decision to scale back our offering.

One of the first effects we noticed was a fairly large group of users blatantly misusing the program by creating a massive number of dummy accounts.

This was somewhat expected and something we could very well have dealt with, even though doing so would have made it somewhat harder for the vast majority of honest supporters to refer their legitimate friends and colleagues.

The second event occurred in late 2011 when the devastating floods in Thailand drove storage prices to new highs. This caused the cost of storage to skyrocket.

While this development was certainly unfortunate, we still kept the program open as we valued the input and support of our users higher than the increased cost.

The final event which ‘broke the straw’ reared its head just a few months ago. We began noticing ads on certain black-hat boards and markets selling ‘lifetime SpiderOak 50 GB storage’ accounts to unsuspecting buyers. That was simply unacceptable.

Instead of spending our days chasing down malicious accounts or banning users or possibly having to close down accounts purchased in good faith, we are choosing to scale the program back. At this level, we feel that users can still enjoy a valuable referral program and it is no longer profitable for scammers to sell our free service to third parties.

In closing, we would like to thank the vast majority of supportive users that have helped spread the word through our Refer-A-Friend program and hope that our user community will understand our reasoning behind the scale-back.

Effective 8 March 2012 our refer-a-friend program will re-boot, offering a max of 10 GB through referrals.

Of course, all users that have previously used our referral program without malicious intent will retain your accrued storage. We will deal directly with the others who were maliciously or inappropriately adding GBs to their account.

TLDR; Our refer-a-friend program was too generous and ended up inviting scammers, so we made the decision to scale it back.

We hope you understand. Much love, SpiderOak

  1. Never mind! I changed (was a paying user anyway) to Wuala. Much more reliable and flexible. I'm going to watch Spideroak widely, but I think this shows that not only the tool with all its unfixed issues and untrusty behavior has many problems, but the company, too! I've tried, used and hoped with SO for more than two years, but I never was really happy!
    Too bad, but maybe in one or two years I'll try that tool again, if the company still exists!?

  2. It's funny. I've had trouble fully adopting a storage host. I love the idea of accessing my data anywhere, having it sync across my devices and the benefit of an online backup. There are three fundamental problems with the idea.

    One is obviously accessibility. Not having a connection means no access, but in the rare situation where you need to access a file that you are unlikely to have net access from, especially with an Android app and extensive mobile coverage, you tend to plan in advance.

    Two is trust, I will never trust having my data unencrypted on the web, ever. Spideroak having built in encryption definitely reduces that, but you still to a degree have to trust SpiderOak that the encryption is only decryptable by you the user. But doing self encryption kills convenience and adds complexity.

    Three, and for me the crucial one is space. I have many TBs of data. Dropbox offers 2GB of storage. Nothing I have is 2GB or less, my document files far exceed this by many Gig, multimedia exceeds this by so much it's laughable and so you look at alternative services. If you want a great deal of storage you pay, but until online storage of personal data becomes less of a convenience and more of a necessity, paying is just not worth it.

    SpiderOak came along with this 50GB referral system and I jumped straight on board. I've promoted it every chance I get, even to the point of being accused of spamming. I've managed to have people sign up, but ultimately am nowhere near the 50GB total that I desire. So seeing this end before I hit that 50GB completely kills me.

    The funny thing is, even 50GB is nowhere near enough for me. My data drive, without any video or programs, is 150GB+ full of stuff I want access to. The full 50GB would at least have allowed me to put my text files and images up there, but now not so much.

    I do understand your situation, drive costs going up, and people reselling 50gb accounts is unfortunate, but I really fear for Spideroak's future now that it's once huge advantage over competitors has now been severely reduced.

  3. I haven't yet used the refer-a-friend program (but intend to). Does the referral system work as "I tell you about SpiderOak, and if you sign up for an account, I get 10 (formerly 50) GB"? If so, then how about instead of — or in addition to — that, if you sign up for a *paid* account, then I get 50 GB? Wouldn't that largely thwart the dummy accounts and black-hat boards?

  4. Reducing the referral program to 10GB will also reduce the number of referrals current users send, so will also reduce the number of new users and the number of potential paying users. From 50GB to 10Gb is a big step down, even more when you think that alternative services offer much more for free. Box or Adrive provide 50GB for free, or in Dropbox you can get more than 20GB for free…

  5. Unlike all these ungrateful free loaders, I completely understand you decision SpikerOak. It is possible to be too nice, and people will take advantage of that, unfortunately.

    I applaud you for being open and transparent about the reasons for the policy change. This is something rarely seen in companies these days. I found the part about people selling free accounts quite shocking!

    Keep up the good work! I appreciate the services you provide the online community.

  6. First, let me restate that any Referral GB you already legitimately have you can keep – this only effects new referrals going forward. So no worry there!

    Next, no need to worry about how this will effect the incoming stream of new customers for SpiderOak and how that impacts our future. Refer-a-friend is only one of many ways that people find out about SpiderOak, and it contributed a relatively small amount to our overall growth. It did contribute much more in the beginning of the program than it does not.

    The suggestion to allow more referral credits if your account or at least one of your referees becomes a paid account would probably work. It's just a little more complicated to implement, and there are some edge cases. (What if one of your referrees pays, you get more referral credit, and then the bank comes back to tell us it was a stolen card, for example?)

    It's not a good plan for us to compete with Adrive or (who just took in $200+ million in venture funding) based on the amount of free storage we provide.

    There's not many winners in that game, and since SpiderOak has has intentionally chosen the bootstrapping route and not taken in venture funding, that's not the way we play. Instead, we focus on providing better value. The financial backing of SpiderOak comes only from our customers, and as such our loyalties are undivided. None of or Adrive do meaningful encryption of your data, for example. We protect your privacy.

  7. @nascent: If I understand you correctly, you want to be able to have 150+ GB of free storage on SpiderOak via promoting us instead of paying for it? I like this plan, and I bet we can work something out. Email me and we'll discuss. :)

  8. Well done. Congratulations to your carefully considered, rational decision. I will continue using SO, which is a great product. Keep up the good work!

  9. Thank you to everyone commenting on our decision. We carefully read and consider all opinions.

    We would just like to point out that users that have already passed 10GB with our previous 50GB cap will indeed retain their storage! We are definitely not out to restrict our legitimate users in any fashion.

    If you have comments, thoughts or rants you would like to share with us on a personal basis you are more than welcome to shoot us an email to as well.

    Very best,
    Daniel @ SpiderOak Inc

  10. It doesn't affect me much (only referred a couple of friends and already pay for 100GB) but I can understand the reasons for this. Like everything in life these days, a rotten few spoil things for the honest majority.

    How about a ramped up limit so that new accounts attract a lower cap, which then rises with each full year you have been using the service (especially those who pay). For instance you start at 10GB but for every full year afterwards you gain another 2-5GB extra until you reach a higher level like 50GB?

  11. 1. What you care is paying customers (or is it?). Make the gap from free to paying less daunting, I might jump. 20GB for $30 per year. In the meantime, I store the not-quite-so-sensitive stuff (week-end in Pisa) on Dropbox (20GB) and the very sensitive backup on SpiderOak (2GB). Professional synchronization is migrating to Wuala, mostly for their encrypted cache that allows me to work temporarily on other PCs and also because I know that when I hit the paying wall, that won't knock me down). Value, pricing, pricing.

    2. I do not recommend a service to friends for 10GB free storage (especially if I can get 20GB for $30): I recommend it because it is great value at the right price. I value their gratitude for a wise advise much more than incremental 10GB (or shouldn't I?). Value, value, pricing.

  12. @Vince: No need for a maximum cap. After 10-20 years, storage space will cost nearly nothing/GB.
    And on the other hand your word documents will use a gigabyte each…
    But he basic idea about increasing the cap for faithful customers each year is very good :-)

  13. I wish this could be reinstated for paying customers… kind of a bonus for being paid. Maybe allow it with people who prepay a year or so? Just a thought.

  14. If the referral limit were back at 50 GB or higher for paying customers, I would jump at the opportunity to upgrade to a paid service plan, (knowing SpiderOak sells itself once you teach others what it's all about and the security benefits offered).