Reading List: “Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves” by Adam L. Penenberg

“Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves” by Adam L. Penenberg

It is worth every businessperson’s time to read at least the introduction and first section of this book. With this, you will have an introduction to   the basics of how viral business, a common internet business model, works.

The book actually has three sections covering viral businesses, marketing and networks. But the basic principles of all of them are pretty clear after reading a few chapters. The rest just gives you more details on how every business from Tupperware to Hotmail to Ning to Twitter and eBay (and many more) grew. There are plenty of stories about failed viral businesses too.

The basic lesson is very simple. He calls it the “viral coefficient.” It is the number of people that your average network member invites to join the network multiplied by the number of those folks that actually do join in. Anything over 1.0 has the potential to grow exponentially.

Of course, growth doesn’t happen automatically. When you are really interested in pursuing this business model, you should go ahead and read the rest of the book. There are plenty of cautionary tales about the barriers to scaling and the need to stay in touch with the needs of your community.

But in today’s networked economy, you should learn to fill out your business knowledge with an understanding of the basic mechanics of viral loops.

Mary Adams