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Comment by virtuous_signal | Hacker News Reader

> If you stay on the job for more than two months, your sponsors get double what they invested (minus our fees).

I feel like the linked Twitter criticisms just gloss over the fact. This is definitely a strange idea but it's a shame people dismissed it out of hand based on crude characterizations.

I think referrals, at least at large companies, have messed up incentives. If you and your direct team don't have to suffer the consequences of a bad hire, then of course you should refer random Blind/Reddit/LinkedIn strangers for a chance at getting several thousand dollars. The "large company" issue may be harder to fix, but if you have the potential to lose money, then you will be more discriminating.

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> If you and your direct team don't have to suffer the consequences of a bad hire, then of course you should refer random Blind/Reddit/LinkedIn strangers for a chance at getting several thousand dollars.

Several thousand dollars is trivial relative to the amount that professional recruiters charge. That's partially because employee referrals are, on average, less trustworthy than good professional recruiters for the reasons you mentioned: You get a small number of very good referrals, but you also get a large number of people playing the referral bonus like a numbers game and putting in every name they can think of.

But this startup had a different problem: They asked employees to pay to basically gamble on the hiring process. A hiring process which is largely out of their control. Most people don't want to gamble on things like this, and with good reason. It was doomed from the start.

Professional recruiters flood you with unqualified candidates (they can't tell the difference). I would never use an outside recruiter, it is less work per hire for the manager to find people themselves (and thus cheaper in time and expenditure).

So, I sponsor myself and in 2 months the company pays me out 30k? Or fires me one day before the 2 months is up and keeps 15k?

How do you imagine that’s going to play out?

“We didn’t realise they wouldn’t be a great fit without an interview”.

Since there is no way to stop bad actors, someone is going to start a new company who’s sole income is based on ripping off job seekers.

As long as two months wages < the cost of the job, you’re effectively making people pay you to work for you.

There’s no sugar coating it: this is a scam.

It will create scam businesses.

If will create law suits over dismissals.

What a brilliant way to drain money from people, if you really don’t care about them at all.

The only thing missing is a bidding system where you all bid for a salary too, and only the lowest bid gets the job.

This is kindof how external recruiters already work (recruiter is paid to get you hired after you stay long enough) . You can fix the bad incentive for employers by taking the money and donating it to charity if the person does not last two months.

Perhaps a version without the payment aspect but with rewards would have been received better. Say a potential referrer would sign up and get three reference tokens (which expire) periodically. Then they can use one to support a person they know for a position. If the employee lasts for two months, they get two tokens and some monetary reward.

Honestly, the barrier of having to sign up to act as a reference for someone might be too much on its own. But, if they manage to get people with good professional networks participating it might be valuable.

I don't think you need the token system. I think you just need some non-monetary cost.

What about just asking references to write a couple of paragraphs?

Having to write a couple of paragraphs is not bad per se, just not sufficiently interesting on its own. some current referral systems already request reference letters and reward successful referrals.

It might be fun to try out a system with a limited number of referrals one can submit that rewards consistent good recommendations.

Referral based hiring means you don't get paid if the person doesn't get hired. So there is already an incentive to not waste one's time referring somebody that is unlikely to get hired.

Either way, this company doesn't appear to provide any solution, it's just inserting itself into the process as a middleman.

Well, the disincentive of wasting one's time (in practice that means generating an application link, or filling out a short form online) is much, much smaller than the potential reward.

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