Journalist Adam Penenberg is the author of Viral Loop: From Facebook to Twitter, How Today's Smartest Businesses Grow Themselves -- a book that is getting rave reviews in the business press, and garnering attention from media watchers fascinated by the way it's being marketed by its author. In Part One of my interview with Professor Penenberg, the reporter who also caught infamous fabulist Stephen Glass, we discuss the legacy of viral marketing, from town criers to Tupperware parties to Twitter.
What is a "viral loop"?
A viral expansion loop is equivalent to a virtuous circle. It's accomplished by incorporating virality into the functionality of a product. That's a mouth full, so let's just say that, in plain English, it means a company grows because each new user begets more users. Just by using a product users spread it. After all, what's the sense of being on Facebook if none of your friends are, or putting something up for sale on eBay if no is around to bid on it? The result is a type of alchemy that, done right, can lead to a self-replicating, borg-like growth: One user becomes two, then four, eight, to a million and more. It's not unlike taking a penny and doubling it every day for a month: By day 30, you'd have about $5.4 million. Eight days after that you'd top $1 billion. The trick is you have to create something people really want, so much so that your customers will happily spread your product for you. That's one of the most intriguing things about today's Web: You can grow a business like you never could before and achieve almost cosmic valuations in record time. While it may sound like something you'd hear on a late night cable TV infomercial, it happens to be true.