%u2013 %u201CThe secret is what%u2019s called a %u2018viral expansion loop,%u2019 a concept little known outside of Silicon Valley (go ahead, Google it%u2014you won%u2019t find much).%u201D Of course you wont%u2019 find it on Google (NSDQ: GOOG). Cause it%u2019s some B-school phrase meaning viral growth, which you%u2019ll find everywhere on Google.
%u2013 %u201CYou can build a billion-dollar business from scratch%u201D. Um%u2026where?
%u2013 %u201CIt%u2019s not unlike taking a penny and doubling it daily for 30 days. By the end of a week, you%u2019d have 64 cents; within two weeks, $81.92; by day 30, about $5.4 million.%u201D Keep in mind, there is no proof that%u2019s actually money we%u2019re talking about, in Ning%u2019s case.
%u2013 %u201CThe company estimates that, at this rate, by New Year%u2019s Eve 2010 it will host some 4 million social networks, with tens of millions of members, serving up billions of page views daily.%u201D This is exactly how Clay Shirky brilliantly dissected the Second Life hype, also in the pages of Valleywag. Active social network numbers, please?
%u2013 %u201CWhich 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. %u2018It%u2019s the power of compounding, predictable growth rates,%u2019 Bianchini says.%u201D Actually, no, if it is viral, then no way it can be predictable. And yes, as Vwag points out, whatever the growth is, it won%u2019t be sustained. Period
RE:crap
by bikram b on May 16, 2008 01:53 PM Permalink
Viral expansion loops have long existed in the offline world.%u201D Um..what was that part about %u201Ca concept little known outside of Silicon Valley%u201D?
%u201CSignificantly, viral-loop networks don%u2019t create content%u2014they organize it. They provide an environment that is, in theory, almost infinitely scalable, and then rely on the wisdom of crowds to create or aggregate masses of material to fill it.%u201D Almost infinitely scalable? Really?
Andreessen points out that %u201Ceventually, everyone tends to be on such a network, the way that everyone has a telephone and everyone has an email address, because the value to being on it is so huge as a result of everyone else being on it.%u201D True, only in this case, on any one of the social networks, not on a Ning network. So the utility is connection through social net, not any one company.
Nicholas Economides, a professor of economics at New York University%u2019s Stern School of Business, characterizes this as %u201Ca network effect.%u201D See, it is that simple%u2026all the words written before this were just words strung together to say just that.
As NYU professor Economides reminds us, %u2018being big doesn%u2019t necessarily mean you will make a profit.%u2019%u201D Thank you, sir.
Ning swells like a river fed from an ever-growing number of tributaries.%u201D I think I just threw up a little in my mouth.
