I don't understand
a) How does this possibly make them money?
b) If they want signups that much, why is the flow for joining the referral program so buggy?
(It's Mailgun, btw)
Although some undoubtedly pay more than the lifetime value of a customer as a "growth hack". This of course can't go on forever.
They take in less than the referral payout in revenue for a customer who sends tens of thousands of emails a year for five years based on their pricing page.
b) Because as long as some signups happen, noone is testing it.
My interpretation of their marketing pages is that they pay out referral payments in cash (actually SWIFT, but...) once a signup has something charged to their credit cards. So they can't rely on unused credits. And they lose money on every referred signup that makes them less than $120 in profit.
This seems insane to me, because someone sending tens of thousands of emails to hundreds of people a year gets them less than half that in revenue.
IMHO referrals work amazing when people you refer mostly want this problem to go away and it's not their primary occupation.
For 6-7 years now I'm using DO for free but my only resource-intensive instance is a personal VPN server that I use from time to time(a few hours a day maybe?).
At first, DO use to give referral payouts in cash, then they limited the payouts to credits, then changed the structure and introduced expiration date to these credits.
I would guess that this referral program that probably helped them a lot with the growth at first is now a burden.