PRODUCT: Photo share community site
VIRAL STRATEGY: Organic
REVENUE: Premium services
http://www.flickr.com
[ SOCIAL NETWORK APPLICATIONS (“WIDGETS”) ]
SLIDE
FOUNDER: Max Levchin
ESTABLISHED: 2005
PRODUCT: Third-party applications
VIRAL STRATEGY: Invitation
REVENUE: Advertising
http://www.slide.com
ROCKYOU
FOUNDERS: Jia Shen, Lance Tokuda
ESTABLISHED: 2006
PRODUCT: Third-party applications
VIRAL STRATEGY: Invitation
REVENUE: Advertising, paid installs for other apps
http://www.rockyou.com
ZYNGA
FOUNDERS: Mark Pincus, Michael Luxton, Eric Schiermeyer, Justin Waldron, Andrew Trader, Steve Schoettler
ESTABLISHED: 2007
PRODUCT: Third-party applications
VIRAL STRATEGY: Invitation
REVENUE: Advertising, virtual goods
http://www.zynga.com
[ SOCIAL MEDIA AD FIRMS ]
LOTAME
FOUNDER: Andy Monfried
ESTABLISHED: 2006
PRODUCT: Advertisements
VIRAL STRATEGY: Targeted users
REVENUE: Fees
http://www.lotame.com
SOCIALMEDIA
FOUNDERS: Seth Goldstein, David Henderson, Dave Gentzel
ESTABLISHED: 2007
PRODUCT: Advertisements
VIRAL STRATEGY: Targeted users, engagement ads
REVENUE: Fees
http://www.socialmedia.com
MEKANISM
FOUNDER: Tommy Means
ESTABLISHED: 2000
PRODUCT: Online marketing
VIRAL STRATEGY: Engagement ads
REVENUE: Fees
http://www.mekanism.com
[ PEER-TO-PEER ]
SKYPE
FOUNDERS: Janus Friis, Niklas Zennstrom
ESTABLISHED: 2003
PRODUCT: Phone, video chat, instant message, and transfer files
REVENUE: Premium services
VIRAL STRATEGY: Invitation, organic
http://www.skype.com
NAPSTER
FOUNDER: Shawn Fanning
ESTABLISHED: 1999
PRODUCT: File-sharing service to distribute MP3 files. Now a paid online music service.
VIRAL STRATEGY: Organic
REVENUE: Premium services
http://www.napster.com
KAZAA
FOUNDERS: Janus Friis, Niklas Zennstrom, Priit Kasesalu
ESTABLISHED: 2001
PRODUCT: File-sharing service to distribute MP3s, videos, applications, and documents. Now a paid music subscription service.
VIRAL STRATEGY: Organic
REVENUE: Paid subscriptions
http://www.kazaa.com
[ NONPROFITS ]
CAUSES
FOUNDERS: Sean Parker, Joe Green
ESTABLISHED: 2007
PRODUCT: Site where users can mobilize their social networks to raise money for a cause; integrates with Facebook as a widget.
VIRAL STRATEGY: Organic, invitation
REVENUE: Donations
http://exchange.causes.com
SIXDEGREES.ORG
FOUNDER: Kevin Bacon
ESTABLISHED: 2007
VIRAL STRATEGY: Organic
REVENUE: Donation
http://www.sixdegrees.org
JUSTGIVE
FOUNDERS: Kendall Webb
ESTABLISHED: 2000
PRODUCT: Charity
VIRAL STRATEGY: Organic
REVENUE: Donation
http://www.justgive.org
MICROGIVING
FOUNDER: John Ferber
ESTABLISHED: 2007
PRODUCT: Charity
VIRAL STRATEGY: Organic
REVENUE: Donation
http://www.microgiving.com
SOCIALVIBE
FOUNDERS: Joe Marchese
ESTABLISHED: February 2008
PRODUCT: Social networking charity
VIRAL: Organic
REVENUE: Donation
http://www.socialvibe.com
Acknowledgments
I first heard of viral loops while interviewing Marc Andreessen for a cover story for Fast Company. If it weren’t for Marc, and his estimable sidekick Gina Bianchini, I probably would never have written this book. The more time I spent with them, the more impressed I was with the sheer wattage of their brains. They generously let me tap their social networks of entrepreneurial contemporaries who are doing fascinating things inside and outside Silicon Valley.
It’s a privilege to write for Fast Company, which would be one of my favorite magazines even if I weren’t listed on the masthead as a contributing writer. My editor, Will Bourne, is one of the best in the business and makes every writer better. A special shout-out to Bob Safian for all his support, and props to David Lidsky, Ellen McGirt, Charles Fishman, Noah Robischon, Jocelyn Hawkes, and everyone else at the magazine.
Kate Lee at ICM is everything an author could want in an agent, and her assistant, Larissa Silva, always gets things done. Jon Furay of Vigorous Pictures offered his usual sage-like counsel and was an ideal first reader. Paul Johnson and Elizabeth Brown at StudioE9 in New York run a cutting-edge Web design firm responsible for my website (http://www.viral-loop.com), the viral loop social networking application and iPhone app. Brooke Hammerling of Brew PR put me in touch with interview subjects and offered spirited lessons in Silicon Valley etiquette.
I’m fortunate to work at the Arthur L. Carter Journalism Institute at New York University. It sports a world-class faculty and facility, which creates a stimulating intellectual environment that foments the exchange of ideas. My colleague, Stephen Solomon, head of the Business and Economic Reporting (BER) program—easily the finest program of its kind in the world—often covered for me as my deadline loomed, and Brooke Kroeger, NYU Journalism’s director, kept things organized so nothing fell through the cracks. Charles Seife offered tips and resources on math and Mike Napolitano made sure technology didn’t detonate. Orli Van Mourik and Carolyn Kormann, former graduate students of mine, crafted detailed dossiers on most of the companies and people included in these pages, while Melissa Malka performed yeoman’s work in transcribing hours upon hours of recorded interviews.
While writing is largely a solitary pursuit, every book is collaborative. It’s all too rare, I think, for an author to be treated with the kindness and respect I’ve received from my publisher. I owe a debt of gratitude to Will Balliett, who acquired Viral Loop for Hyperion and championed it within the company. Brendan Duffy provided valuable editorial guidance and made the book better, and Katherine Tasheff is one hip digital marketing guru. Ellen Archer runs a classy organization that deserves credit for throwing its weight behind quality projects. Thanks also to Mindy Stock-field and Carolyn Grill of Hyperion in New York and to Jack Fogg in London at Hodder, which publishes Viral Loop in the UK.
One of the best things about researching a book is that I get to interview whip-smart people like James Hong and Jim Young, founders of Hot or Not; Rick Goings, CEO of Tupperware; venture capitalists Fred Wilson of Union Square Ventures, Steve Jurvetson and Tim Draper of DFJ, Jeremy Liew of Lightspeed Venture Partners, and Howard Hartenbaum, an early investor in Skype; Peter Thiel, Reid Hoffman, and Max Levchin formerly of PayPal; Chris DeWolfe and Aber Whitcomb, who were at MySpace from the beginning; Mark Zuckerberg of Facebook and Matt Cohler, who left there to become a venture capitalist; Michael Birch of Bebo; Lance Tokuda, Sandi Sayama, and Jia Shen of RockYou; Greg Tseng and Johann Schleir-Smith of Tagged; Mark Pincus from Zynga; Seth Goldstein and David Gentzel of Social Media; Michael Jackson, Skype’s former director of operations, and Kelly Larabee, who once handled media for the VoIP company; Jack Smith and Sabeer Bhatia o
f Hotmail; blogger and entrepreneur Andrew Chen; Mary Hodder, who practically lives inside the digital realm; Charlene Li and Jeremiah Owyang—astute technology analysts; the very real Caterina Fake; Andy Monfried of Lotame; the aptly named Maynard Webb, who saved eBay from death by a thousand glitches; Konstantin Guericke, who once led Jaxtr; Hans Gieskes of H3.com; Jonathan Glick of Gerson Lehrman; Kakul Srivastava of Flickr/ Yahoo; and Jason Calacanis, CEO of Mahalo.
But the biggest credit goes to my wife, Charlotte, for so long putting up with my “mistress” (as she called it). As challenging as any book is to any writer, it can be equally daunting for the people in his life—for Charlotte, who had to do without her husband for long stretches of time, and my little girls, Lila and Sophie, who missed their daddy. I’m also grateful to my extended family: Nana Lin, Nana Bacon, Auntie Me, Uncle B, Charlie Boy, Nana Tina, and everyone else who pitched in while I pounded out words on my now-battered Apple MacBook Pro keyboard (certain letters have even worn away). Here’s also to the memory of Barbara and Arnold. I miss you.
Notes
Transcripts of interviews and more detailed endnotes with hyperlinks available at http://www.viralloop.com. Quotes in text originate from interview with subject unless otherwise noted.
PROLOGUE
Events and descriptions: Interviews with James Hong and Jim Young.
Additional background: “Idea of rate-a-person site gets a perfect 10,” by Janet Kornblum, USA Today, November 28, 2000; “Cyber Digest: A Weekly Spin on the Web,” by Noah Robischon, Entertainment Weekly, December 1, 2000; “A New Web Site Asks, ‘Who’s the Fairest?’” by Joanna Weiss, The Boston Globe, December 4, 2000; “These Men Want to Know…Am I Hot?” by Mary Huhn, New York Post, December 5, 2000; “Hot Stuff or a Bit of Rough? The World Decides,” by Molly Watson, Evening Standard, December 5, 2000; “Ego Boost or Bust,” by Daniel J. Vargas, Houston Chronicle, January 11, 2001; “Am I Hot?”: Popular Site Burning to Know,” by David Plotnikoff, Denver Post, February 5, 2001; “Digits”: Technology News and Insights, Wall Street Journal, August 2, 2001; “The Hot or Not Guys,” by Adam Green, The New Yorker, July 8, 2002; “Facing the World with Egos Exposed,” by Gary Rivlin, New York Times, June 3, 2004; “Hot or Not?” by David Momphard, Taipei Times, July 3, 2004; “You Gotta Love the Enthusiasm of Jim and James,” by Alan T. Saracevic, San Francisco Chronicle, September 12, 2004; “Hot or Not? Meet the Guys Behind the Popular Rating-and-Dating Web Spot,” by Jessica Yadegaran, Knight Ridder, November 7, 2005; “He Hopes Flush of Embarrassment Leads to Flush of Success,” by Kevin Maney, USA Today, November 23, 2005.
Salon.com was planning an article: “Am I Hot Or Not?” by Janelle Brown, Salon.com, October 11, 2000.
INTRODUCTION
Peter Thiel, whose $500,000 investment in Facebook: Facebook Factsheet http://www.facebook.com/press/info.php? factsheet
Ning raised $104 million in venture capital: “Marc Andreessen Dings Google’s Friend Connect,” by Dan Farber, CNET, May 13, 2008.
Slide, which creates photo slideshow tools, attracted $50 million: “Are These Widgets Worth Half a Billion?” by Jessi Hempel and Michael V. Copland, Fortune, March 25, 2008.
joked that he’s considered changing his form’s name to “Viral Ventures” and “You can create a crappy application”: Interview with Fred Wilson.
“is worth a lot of money” and “the most advanced direct-marketing strategy”: Interview with Andrew Chen.
“One of my fundamental beliefs”: “The Facebooker Who Friended Obama,” by Brian Stelter, New York Times, July 7, 2008.
The campaign brought in $750 million from 4 million donors: “Final Fundraising Tally for Obama Exceeded $750 Million,” by Alec Mac-Gillis and Sarah Cohen, Washington Post, December 6, 2008.
Obama’s campaign raised $55 million online: “Obama raises $55 million in February, sets new record,” CNN, March 6, 2008: http://www.cnn.com/2008/POLITICS/03/06/democrats.campaign/index.html
“Since most have not donated anything like the maximum amount”: “Barack Obama is master of the new Facebook politics,” by Andrew Sullivan, Sunday Times, May 25, 2008.
“I have the record and the scars to prove it”: “McCain: End ‘the constant partisan rancor,’” by Alex Johnson, msnbc.com, September 4, 2008.
“After nearly a year on the campaign trail”: Michelle Obama, by Elizabeth Lightfoot, The Lyons Press, 2008.
“Don’t walk away thinking that you can talk to only one customer”: “5 product management lessons from the Obama campaign,” by Gopal Shenoy, productmanagementtips.com, November 7, 2008.
“The Wright brothers,” while Obama’s “skipped Boeing, Mercury, Gemini”: “The Facebooker Who Friended Obama,” by Brian Stelter, New York Times, July 7, 2008.
“The viral adoption model”: Interview with Fred Wilson.
CHAPTER 1
Material on Tupperware: Interview with Tupperware CEO, Rick Goings; Tupperware: The Promise of Plastics in 1950s America, by Alison J. Clarke, Diane Pub Co., 1999; Tupperware Unsealed: Brownie Wise, Earl Tupper, and the Home Party Pioneers, by Bob Kealing, University Press of Florida, 2008; “Tupperware,” Time, September 8, 1947; “Tupperware Sales Up 115 Percent,” New York Times, August 20, 1953; “Is the Party Over? Has America Heard the Last Burp out of Tupperware?” by Charles Fishman, Orlando Sentinel, Mar 15, 1987; “Tupperware the Housewives’ Choice,” by Alison Clarke, The Guardian, September 27, 1990. “Going Stale: Families Have Changed but Tupperware Keeps Holding Its Parties,” by Laurie M. Grossman, Wall Street Journal, July 21, 1992; “Brownie Wise Sealed Tupperware’s Future,” by Philip Martin, Arkansas Democrat Gazette, February 10, 2004; Tupperware: An American Experience, documentary by Laurie Kahn-Leavitt that aired on PBS in December 2003.
Material on Charles Ponzi: The Rise of Mr. Ponzi, by Charles Ponzi, Inkwell Publishers (American edition), 2001; Ponzi’s Scheme, by Michael Zuckoff, Random House, 2005.
“Open Mouth Container and Nonsnap type of closure”: U.S. Patent # 2487400.
CHAPTER 2
Events and descriptions: Interview with Marc Andreessen; Netscape Time: The Making of the Billion-Dollar Start-Up That Took on Microsoft, by Jim Clark, St. Martin’s Griffin, July 16, 2000; Dot.con: How America Lost Its Mind and Money in the Internet Era, by John Cassidy, Harper Perennial, 2003; Marc Andreessen: Web Warrior, by Daniel Ehrenhaft, 21st Century, April 1, 2001; “Architects of the Web,” by Robert H. Reid, John Wiley & Sons, 1997. “What It’s Really Like to be Marc Andreessen,” by Rick Tetzeli, Fortune, December 9, 1996. “Netscape Knows Fame and Aspires to Fortune,” by Peter H. Lewis, New York Times, March 1, 1995. “High Stakes Winners,” by James Collins, et al., Time, February 19, 1996. “The Man Who Invented the Web,” by Robert Wright, Time, May 19, 1997.
In 1992, 4.5 million people were plugged into the Internet: The Affluent Consumer: Marketing and Selling the Luxury Lifestyle, by Ronald Mich-man and Edward Mazze, Praeger Publishers, 2006.
1 million people had downloaded Mosaic: Nerds 2.0.1—A Human Face, PBS documentary, 1998. Text at http://www.pbs.org/opb/nerds 2.0.1/wiring_world/mosaic.html
Number of Internet Users, 1992–2007: Data from http://www.inter networldstats.com/emarketing.htm and http://www.allaboutmarket research.com/internet.htm
Number of Websites, 1992–2007: http://royal.pingdom.com/2008/04/ 04/how-we-got-from-l-to-162-million-websites-on-the-internet/ and http://www.pandia.com/searchworld/2000–39-oclc-size.html and “Web reaches new milestone: 100 million sites,” by Marsha Walton, CNN, November 1, 2006; and interview with Marc Andreessen.
New York Times article on the front page of the business section: “A Free and Simple Computer Link,” by John Markoff, New York Times, December 8, 1993.
CHAPTER 3
Events and descriptions: Interviews with Ning cofounders Marc Andreessen and Gina Bianchini.
Additional material: Interviews with Jeremy Liew, Mary Hodder, Nicholas Econo
mides, John Manzo, Greg Tseng, and Johann Schleir-Smith; The Long Tail: Why the Future of Business Is Selling Less of More, by Chris Anderson, Hyperion, 2006; The Wealth of Networks, by Yochai Benler, Yale University Press, 2006; Mathematics in Medicine and the Life Sciences, by F. C. Hoppen-stadt and C. S. Peskin, Springer-Verlag, 1992; The Power of Identity (Vol. II), by Manuel Castells, Blackwell, 1997.
Viral Coefficient charts: Data provided by Jeremy Liew, partner at Lightspeed Partners, in a blog post, “Viral Marketing, Randomness, and the Difficulty of Controlling Growth in Social Media,” September 13, 2007 (http://lsvp.wordpress.com/2007/09/13/viral-marketing-randomness-and-the-difficulty-of-controlling-growth-in-social-media/).
Birthday Alarm, which generated $3 million a year in revenue: Interview with Michael Birch, Birthday Alarm cofounder.
“Web 2.0 Hottie”: “Return of the Ning,” by Chris Mohney, Valleywag (now posted under Gawker), February 27, 2007.
“Ning RIP?” and “Everyone wants a social network”: Posts on Techcrunch.com, by Michael Arrington, January 20, 2006 and September 23, 2007.
Pareto’s Law: The Long Tail: Why the Future of Business Is Selling Less of More,” by Chris Anderson, Hyperion, 2006.
MySpace, which News Corp. bought for $580 million; Murdoch estimates is worth close to $6 billion: “$6 billion MySpace: Will this Levinsohn cash in?” by Donna Bogatin, ZDNET blog, November 17, 2006.
Material on the commoditized Internet, digital me, hooked on the speed of Web life inspired by articles I published in Media magazine, including: “The Speed Squeeze,” by Adam L. Penenberg, Media, September 22, 2006; and “At the End of the Paper Trail: Why Ink on Pulp May Soon Become an Artifact,” by Adam L. Penenberg, Media, October 1, 2007.
“We know of no people without names”: Social Theory and the Politics of Identity, by Craig Calhoun (ed.), Wiley-Blackwell, 1994.
The United States has essentially become a “multitrillion-dollar brand,” and “Brands, products, fashions”: Culture Jam: How to Reverse America’s Suicidal Consumer Binge—And Why We Must, by Kalle Lasn, Harper Paperbacks, 2000.
“as human beings we are social creatures”: Interview with John Manzo, sociology professor at the University of Calgary in Alberta.