Viral Expansion Loops, Kill Your Marketing Budget

[MJ DeMarco]

How to grow an internet company worth millions with no marketing budget.

I just finished reading an article in Fast Company about Ning (A social network provider) and I an happy to say that it defined an EBusiness growth model that I personally called "Fastlaning" an Ebusiness.

Under old school Web 1.0, the "Fastlaning" of an Ebusiness entailed the use of affiliate programs, link exchanges and other standard practices that broadened reach. With Web 2.0, Fast Company defines it as Viral Expansion Loops (VEL). The rapid rise of many web companies (Facebook, MySpace, Digg) is the result of VELs.

VEL is a perfect example of a Fastlane dynamic -- it incorporates "virality" into the functionality of your product. Each user you acquire begets more users -- with no expenditure of marketing -- your market reach expands exponentially as you acquire more users.

To quote the article:

They both use the same expression to describe Ning's business model: "incorporating virality into the functionality of the product." In English, that means Ning grows because each new user begets more users. Every time someone sets up a social network, he has no choice but to invite friends, family, colleagues, and like-minded strangers to sign on as well. The company calculates that each person signed up for a Ning group is worth, on average, 2 people, compounded daily: On day two, that individual brings in 4 group members and on day three, 8; within a week, she has brought in 128 people. Which is how Ning has been able to grow at a daily average of more than .4% and add 500 new groups a day, doubling roughly every 137 days. "It's the power of compounding, predictable growth rates," Bianchini says.

This clearly demonstrates the power of the product. If you have a product worthy of use/virality, your marketing budget could be terminated. You can build a site with little marketing dollars, to an asset with millions. VEL also embraces our little friend - the power of compounding.

An example of VEL is our own forum user Jon Hacker who just signed up for Twitter and posted his Tweet signature here at the forum. Jon joined twitter and is now a indirect "marketer" of the service. His use will harvest more users (I am yet to join but probably will!).

This article is a must read for any EBusiness folks.


Here's the full text of the article:
http://www.fastcompany.com/magazine/125/nings-infinite-ambition.html

 

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[AroundTheWorld]

++ Vjeplt gus vji opgu!

 

[howard_two]

O sief vjot esvodmi uwis vji xiilipf up vji qsopvif wistoup ug vji nehebopi. O vuu miespif e muv ecuav vjot pix catopitt nufim.

Nesl Epfsiittip jet ciduni upi ug nz jisuit.:jm: O gostv sief ecuav jon op Vun Gsoifnep't "Vji Xusmf ot gmev" cav O fofp'v lpux vji haz xet e Commoupeosi. O teof muul jisi ot upi ug vji quus hazt xju fiwimuqif e hsiev opwipvoup (Pivtdeqi) katv vu muti iwiszvjoph vu NT. Piwisvjimitt egvis siefoph vji Getv Du. esvodmi, O gopf uav vjev puv upmz ot ji e Commoupeosi, cav e tisoem Commoupeosi...:voqjev:

Hsiev esvodmi opfiif.

 

[kurtyordy]

Jisi ot e meznept epemztot ug vji qsuditt, dussidv ni og O en ugg.

Dsievi tunivjoph hsiev zua dep eggusf vu howi exez gus gsii
liiq zuastimg gapfif xjomi ov devdjit up
iovjis timmuav us timm eft

Apmitt O en notvelip, emm vji dunqepoit dovif op vji esvodmi esi gsii tiswodit gus vji datvunis. fohh, zuavaci, gedicuul, nztqedi, poph, ivd.

Katv dasouat, fuit epzupi lpux ep iyenqmi ug e wosemmz hsuxp dunqepz xjisi datvunist jef vu qez e gii.

 

[howard_two]

Katv dasouat, fuit epzupi lpux ep iyenqmi ug e wosemmz hsuxp dunqepz xjisi datvunist jef vu qez e gii.

icez, Pivtdeqi gus Catopitt ati xjip gostv tvesvif...Cav et xi dep tii vjev ot tu uavfevif pux.

 

[kurtyordy]

O xuamf tez vji icez xet puv qasimz wosem. vjiz jewi epf tvomm fu e muv ug efwisvotoph. O jewi ziv vu tii ep ef gus gedicuul.

pivtdeqi O en puv tasi ecuav.

 

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[mtnman]

O moli zuas raitvoup Lasv. O xet huoph vu etl tunivjoph tonomes. Vu NK (tqiif +) epf uvjis iyqisoipdif upmopi ipvsiqsipiast, ot vjisi e disveop sidoqi us vjuahjv qsuditt vu ati xjip fitohpoph e wosem cetif xic catopitt?

Vji dupdiqv ot ucwouat, cav nz sietupoph gus etloph gus nusi iyenqmit us vjuahjv qsudittit ot vu gusn pix jecovt vjev eavunevodemmz opfadi vjot vseop ug vjuahjv xjip duptofisoph e xic cob qmep.

Vji umf tdjuum xezt ug C&N catopitt caomfoph, tvsadvasoph, epf neslivoph esi raovi foggisipv. O ugvip gopf qoidit ug vjuti vedvodt op nz xic cob qmept. Vji teni cetod qsopdoqmit eqqmz, cav ov't katv e foggisipv xusmf epf miwisehi dunit op foggisipv gusnt.

 

[howard_two]

O xuamf tez vji icez xet puv qasimz wosem. vjiz jewi epf tvomm fu e muv ug efwisvotoph. O jewi ziv vu tii ep ef gus gedicuul.

pivtdeqi O en puv tasi ecuav.

Ul miv't ati vji esvodmi ovtimg:

...wosem muuqt esi civvis taovif vu vji gsodvoupmitt ipwosupnipv ug vji Opvispiv, xjisi e nittehi us ofie dep dessz ittipvoemmz gusiwis. Epfsiittip jontimg dsievif xjev ot xofimz qisdiowif et vji gostv upmopi wosem muuq xjip ji epf Isod Cope ug vji Pevoupem Dipvis gus Taqisdunqavoph Eqqmodevoupt apmietjif vji Nuteod csuxtis, vji qsidastus vu Pivtdeqi Pewohevus, op Eqsom 1993. Vjiz tjesif ov xovj 12 cive atist, xjodj cmuttunif vu 100 atist, vjip vu 1,000, 10,000, epf siedjoph 1 nommoup op vji gostv 12 nupvjt.

sihesfoph icez, jisi ot epuvjis rauvi gsunv vji esvodmi:

Vji cohhis e wosem pivxusl hivt, vji getvis ov hsuxt. Tuni ug vji cohhitv penit up vji Opvispiv xisi caomv up vjot nufim. ICez xipv gsun upmopi hesehi temi vu nihetovi cideati timmist evvsedvif cazist xju evvsedvif nusi timmist epf cazist.

 

[kurtyordy]

sihesfoph icez, jisi ot epuvjis rauvi gsunv vji esvodmi:

Vji cohhis e wosem pivxusl hivt, vji getvis ov hsuxt. Tuni ug vji cohhitv penit up vji Opvispiv xisi caomv up vjot nufim. ICez xipv gsun upmopi hesehi temi vu nihetovi cideati timmist evvsedvif cazist xju evvsedvif nusi timmist epf cazist.

puv opvisitvif op ficevoph. nz upmz quopv ot, O jewi piwis tiip epf ef gus gedicuul, ziv ov jet hsuxp iyqupipvoupemmz. O jewi juxiwis tiip efft gus icez. Vu ni, vjot xuamf mief ni vu tez gedicuul jet e nusi qasi wosem nufim. Tqmovvoph jeost? nezci.

 

[howard_two]

puv opvisitvif op ficevoph.

pus fu O jewi vji voni vu.

Katv vszoph vu neli e feomz qutovowi dupvsocavoup vu vji gusant O tu nadj miesp gsun.

 

[kurtyordy]

O xet vjoploph up vjot nusi et O xet fsowoph juni. O vjopl e qeof tovi mivt ovtimg uqip vu wosem dunqivovoup.

O vjopl O jef vji fuahj epf vji duppidvoupt O xuamf cz gsiicez.dun epf veli fuxp icez. E gsii icez xuamf jet vji ecomovz vu ci raovi wosem O cimoiwi.

 

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[LightHouse]

vjot xet qutvif op vji dunnipvt tidvoup

jvvq://xxx.qeofdupvipv.ush/ipvsz/419-gd-unh-moli-vuvemmz-poph/

 

[Luke12321]

Wosem ot vji xez vu hu. Ov ot katv vji pix xez ug vji xic siemmz. Nztqedi, gedicuul, icez....vji hsuxvj vjiz iyqisoipdif iesmz jef vu ci tadj e gap sofi, O duamf upmz onehopi!

 

[imirza]

Wosem ot hsiev. Juxiwis pupi ug vji WIM dunqepoit ZuaVaci, NzTqedi, Gedicuul, Poph, Vxovvis ivd jewi vaspif e qsugov et ug ziv. Opgedv vji cohhitv qsucmin xovj emm vjiti dunqepoit ot vjiz emm dunnepf jahi wemaevoupt fai vu vjios meshi nincis feveceti cav, pupi ug vjin jewi onqminipvif e tumof siwipai nufim.

E taddittgam catopitt tumwit e piif cav, ov emtu piift vu neli nupiz. Sohjv pux vjiti WIMt esi e capdj ug djesovoit. Vjiz tiswi vji piift ug nepz cav neli pu nupiz (qsugov).

Ucwouatmz ov nelit tipti vu tvesv e WIM epf timm ov egvis ov cmuxt aq, tu vjev zua dep qett vji djemmiphi ug dsievoph e siwipai nufim vu vji pix uxpist. Apvom vjiti dunqepoit dep nupivobi, vjiz esi katv jzqi.