Climbing the Unknown: An Update on the Amenity Yoga Referral Program

Hi Everyone,

I wanted to provide an update on the Amenity Yoga newsletter referral program. We're about halfway through, and I was excited to share that five readers have referred 20 new subscribers each, resulting in approximately 100 total new subscribers.

Key word - was. Indeed, there's more to the story.

The Initial Success and Subsequent Challenges

After receiving shipping addresses from our new subscribers—names and valid locations in Rampur, India—I used our business Amazon account to shop on Amazon.in for equivalent products and shipped referral gifts to the first two winners.

Despite the time it took to select & ship equivalent products, everything seemed to be going well. In fact, my first two referral program winners referred friends who also started to participate. It was working!

Then, I noticed a pattern: subscribers were confirming their email addresses at suspiciously rapid intervals. A terrible thought crossed my mind—what if they were using temporary email domains?

My suspicion was correct. Of the 100 new subscribers, only 14 were legitimate referrals. I canceled the remaining gifts on Amazon (recovering about $80 of the $200 spent) and notified participants with the following email:

Subject: Notice Regarding Your Referral Program Status

Hi [Name],

We hope this message finds you well.

It has come to our attention that several of your referrals were temporary email addresses, which is against the terms and conditions of our referral program. As a result, we have adjusted your total number of valid referrals to [Adjusted Number].

We appreciate your understanding and continued support of our program. If you have any questions or need further clarification, please feel free to reach out to us.

Thank you for your cooperation.

Best regards,

The Amenity Yoga Team

Reflecting on the Experience

Technically, this should be considered "failing forward"—after all, we gained 14 new subscribers, right? But the reality is something many entrepreneurs feel deeply—a sense of frustration over "wasted" time, money and energy over handling problems.

This constant stream of problem-solving, high intensity, and failure can leave founders feeling defeated. Even Jensen Huang, the co-founder and CEO of Nvidia, is adamant that given the chance he would not start the company again. And this is coming from the founder of the most successful business in the current market!

I too struggle with calling it quits for many reasons. Every step forward can feel like three steps back.

So Why Persist?

For me personally, I've held onto the impact I've had on my instructors and students who take our wellness classes. I also tell myself this crazy journey helps me be a better venture investor by relating to the nearly impossible task of scaling a business.

For other founders I've worked with, there's a deep sense of ownership and pride in building something from scratch. The journey is filled with learning, growth, and the occasional triumph that makes it all worthwhile.

Tactical Learnings for Entrepreneurs

Here are some practical takeaways for entrepreneurs looking to set up an effective referral program:

1. Validate Addresses Before Sending Milestone Emails: Ensure that you enable an element of manual review to approve referrals. When you do this review, check that the participants referred are valid AND that they fall within your rules and conditions. For example, you can leverage verification tools with services like Verify.io or other validation sites to ensure email domains are legitimate.
2. Create a Terms and Conditions Page: I created a terms and conditions page that clearly states the contest is only valid within the 50 states of the US. I should have followed the rules I outlined and told the participants from India they did not qualify for the program. Instead, I got too excited at the growth and made a bad decision. Learn from this and stay disciplined when executing your own program.
3. Define Shipping Regions Clearly: If you ship physical products, make the shipping region clear in your terms and agreements. Communicate early and often with participants if they are outside your region. Don’t spend time finding equivalent products and shipping abroad like I did—it's not a productive use of time.
4. Separate Personal from Professional: I felt deflated when I realized my referral program had been manipulated and my first instinct was to shut the program down. However, I took a step back and remembered: nothing in business is personal. That being said - it also is also true that my startup feels personal to me. As a founder, I have to hold both of these truths: business is not personal and my business IS personal to me. That said, it is also my job to not to let emotions impact quality of decisions.
5. Quantify Goals and Measure Often: Creating objective milestones through KPIs, and measuring these metrics over time help me to avoid causal explanations of events as successes or failures. In other words - numbers don't lie and can help you to center yourself around failing forward. Psychology principles such as Attribution Theory support this.
6. Consider Incentives for Human Behavior: Reward programs in general are an attempt to incentivize humans to act in a certain way. In creating an incentive program, it's therefore important to consider all realms of incentives - including cheating.

Revisiting Our Initial Metrics

To recap, here's where we started:

• Subscribers: 197
• Target Subscriber Growth: 10-20% (20-40 new subscribers)
• Actual New Subscribers Gained: 14 legitimate new subscribers
• Customer Acquisition Cost (CAC): $8.57 per new subscriber

Even with the setbacks, we did see growth—albeit with additional time and energy needed to get there. These 14 new subscribers represent a roughly 7% increase in our total subscriber base, which is a step in the right direction. However, they cost a LOT more in time and money than was worth it.

This seems to be the bottom line in entrepreneurship doesn't it? One step forward, three steps back, and in the eyes of Jensen Huang, not worth starting over. Still - the sliver of hope that it may all be worth it in retrospect keeps us moving forward.

My Next Steps

I decided to let the referral program ride out its remaining time with minimal continued promotion. Then, I will consider how I can package these learnings to a referral program of the core product at Amenity Yoga - subscription wellness classes.

If you're interested to see how this evolves, stay tuned. Your support and feedback mean the world to me as we navigate this journey together.

Onwards!