In India what would be some good ways to get lets say 1 million members signed up. What you are becoming a member for is important but lets assume that the value proposition makes sense.

Initially if say for the first 10000 members sign up is free. Then membership costs Rs 99/-. A member gets Rs. 50 for every member that they refer. Thus early members could make significant amounts of referral income.

This kindof program would require around 5 lacs or Rs 500,000 of capital. After that Rs 49 per member would be available so you could acquire a million members for a relatively low cost. There may be other costs related to processing of member acquisition etc. To cover those the Rs 49 would provide approx 4.9 crores. If the other costs were say 10 crores then the net cost of acquiring a million members would be Rs 50 per member which could be worth it if network effects under Metcalfe’s law kick in.

What do people think. Is 10000 free memberships the right number. Do Rs 50 as referral fee and Rs. 99 as membership fee seem like good numbers.

Do others have any other suggestions on building critical mass. Are there are any examples of successful member get member schemes in India which are just referral based and not MLM ( multi level marketing) like Amway or Oriflame ?

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