Will Marlow

A lot of people think (or hope) that one of their ideas or marketing materials will somehow "go viral," but most people don't put much time into thinking about what actually causes something to spread virally.  Without doing too much math, here's the basics of how something spreads virally: You start with your initial userbase (let's say it's 100 users).  A percentage of your userbase (for easy math, let's say 10%) will invite 10 people to check out your idea or product. Of those 10 invites they send out, let's assume 10% accept the invitation and become new users.  You add these new users to your original userbase.  But you also should assume (for easy math) that your attrition rate is 10%, so you subtract 10% from your initial userbase.  This represents one wave of viral growth that will then repeat itself to continue the trend.  (In this example, of course, you're losing the same number of users that you're gaining.)

But here's how it gets tricky: you can assume that your viral growth will get worse over time, because in the second, third, and fourth waves of growth, you can expect more and more invitations to go out to the same people, which means your conversion rate (which started out at 10%) may plummet as invitations reach people who are already users, or who have already rejected invitations.  So people begin adopting it at a lower rate, while your attrition rate is likely to stay the same.  This means that each wave of growth is smaller, until eventually it stops.  As Andrew Chen explains it, each "new batch of users needs to exceed the previous batch in order to "go viral."

What can you do with this information?  Well, the most important thing you can do is set measurable goals for viral activity to guide your decisions and planning to avoid wasting time and resources.  If you know what you're looking for (adoption rate; conversion rate of new users; attrition rate of your base over time; the size of the universe of users), you can actually measure the factors that have the greatest impact on your success and you can learn how to improve results over time.  Like most useful things, viral activity isn't guided by one enormous X-factor that either is present or absent.  If you know the rules, you can make it happen.

PS - If you want to go deeper into viral models, follow this link to read Andrew Chen's stuff.  I will return to this topic periodically, and I hope my posts are helpful on this subject, but if there's a better place than Chen's blog to go for an in depth, technical analysis of viral products and marketing, I'm unaware of it.

Will Marlow co-founded AlumniFidelity to help his clients reposition their fundraising to benefit from Web 2.0 technology and marketing techniques. He’s working with clients such as UVA, the College of William & Mary, the University of Oklahoma, Bowling Green State University, Randolph Macon College, and he loves nothing better than a thorny marketing challenge.  Email him at will@alumnifidelity.com.  

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Sometimes it’s a good idea to put all your eggs in one basket.  This is one of the key lessons of the startup bible, Crossing the Chasm, which I’m re-reading right now.

The Chasm is the place where many high-tech startups die.  It’s the gap between the early market of innovators (people who are enthusiastic about buying a groundbreaking product that is only 80 percent complete) and the pragmatists (the people who look at a product that is 80 percent complete and say, Where’s the other 20 percent?). 

In order to leap across the Chasm, you need to commit to building the “whole product” for at least one target customer.  Rather than making the common mistake of building a product that’s got something for all your potential target customers, you need to give just one target customer everything.  If you do that, you’ll get your first round of pragmatist customers, who will be your reference base as you seek to get more pragmatist customers.  (Don’t forget: there are a lot more pragmatists than there are innovators, so you’ll want your reference base to be full of pragmatists so they can tell their friends.)

I regularly recommend Geoffrey Moore’s book Crossing the Chasm to other people who work at startups.  For now, this book, along with the sequel, Inside the Tornado and Guy Kawasaki’s Art of the Start, stands alone as required reading for entrepreneurs, in my opinion.  If anyone has suggestions for books that they would recommend to entrepreneurs, please let me know at will@alumnifidelity.com, or @willmarlow, or in comments below, or let me know when you run into me on the street :)

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I attended a good panel this morning organized by the people at Ogilvy PR in DC.  The topic was innovation in organizations, and there were some great panelists.

We ran out of time, but I would have loved to discuss the dynamic between the outward-facing guys and inward-facing guys within companies.  My own attitude has been that a company should do its best to create tension between the outward-facing team (maybe led by the CEO), and the inward-facing team (led by the COO).  Both teams are essential to stimulating innovation.  The trick is, even though you want to foster tension between the outward and inward forces, you need the outward force to win often enough to keep people very busy.

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First of all, this post is NOT intended to be a political statement or judgment, merely an observation.  The only provocative aspect of this post is that the title could have been, "One Way the Government Affects the Economy," but instead I chose to use Obama's name because my example comes from his policies.  

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