Viral Loops and Whuffie

Two concepts that I’ve known abstractly for some time have been clarified in my mind as they relate to my specialty: Web application development.

What makes one Website launch to instant success while others struggle to get just a few users and then disappear? To be fair, I’m sure there are a million reasons, but I’m going to focus on two that are particularly applicable to the new social economy of the web.

The first is a Viral Loop or “viral expansion loop“. A viral loop is basically a scenario where in order for one to get value from a product or service, they have to get others to use that product or service. Twitter is a perfect example. Sign up for a twitter account, but don’t tell anybody that you are on Twitter. This means no contact at all, including following people you know. Now, how’s that working out for you?

It doesn’t work. Twitter has no value unless others know you are on it, so the first thing you do when you sign up is find people you know and follow them. Now they know you are on it, and then you tell all your friends that aren’t on it to join. This makes Twitter valuable. And viral.

The other is called social capital. Tara Hunt has a new book coming out called The Whuffie Factor in which she explains the value of social capital (and why she calls it Whuffie).

In an interview with Tara on Mixergy.com, she gives a great preview of the concepts. I recommend you listen to the interview. It’s a great insight into how to build up social capital, bank it, and use that capital to “buy” attention when you have something to launch.

There is a catch of course. Increasing your Social capital happens organically, so you have to be willing to give … to get. Building captial happens when you participate in community and give freely for the benefit of the community. You can’t force it. You can’t game it. Be genuine and you will build the network and relationships that will pay dividends in the end.

Updated (thanks to @sunaz): In the interview Tara uses Zappos.com as an example or how whuffie can propel success. From their customer service policies to their CEO’s participation on twitter, their openness, transparency and commitment to their customers creates loyalty and success.

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4 thoughts on “Viral Loops and Whuffie

  1. sunaz says:

    What would be interesting is if there was a case of an example of a site/service that got big with the wuffie factor.

  2. Steve says:

    @sunaz In the interview she uses zappos.com and herself as examples. Also she talks about getsatisfaction.com as a way to get whuffie.

  3. @Steve thanks for including my interview with Tara in your post. She convinced me that growing social capital will do more for an online business than growing the ad budget.

    @Sunaz when I interview people, I ask them to give me a lot of examples. I hate empty theories. Tara gave a bunch. Zappos was a great one. Another one is Moleskine. Ever wonder why a little notebook became so much more than just another notebook? Tara talks about it.

  4. Steve says:

    @Andrew no problem, it was a great interview. I also really liked the one with the Barefoot CEO.

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