Generating Network Effects
The subtle art of virality
How does a product go viral? Well, mathematically, there's always some kind of exponential curve involved.
If you spend $1 on marketing, and as a result, you acquire 1 new user (or customer), then spending $100 will (in a perfect world) get you 100 users. The growth here is quite linear.
But, if even a single user shares your product with their network, and then someone in that network shares it with their network, you can quickly end up with an exponential curve of growth.
This is a network effect. Where every new user acquired can lead to 2 or more further users. With social media and the Internet, this can sometimes even be over 100.
Now we are talking.
The result is viral/exponential growth which means you would have to spend much less on marketing while, at the same time, witnessing explosive growth.
Now let's say you drop your marketing budget down to zero or don't have one, to begin with. This would still work. Every user acquired organically would lead to several more users. Before you know it, the network effect will ignite exponential growth. You can start with small numbers and end up with very large ones.
And if you pair that with a revenue-generating product with low overhead, this can lead to an exponential income stream.
That's one way to become financially free relatively fast while starting out with little capital.
It's much easier to see this trend in technology companies, as the Internet leans naturally towards infinite scale.
But physical products have been generating network effects for years as well. Think of products with strong brands such as Apple, Disney, Nike, Coca-Cola, Starbucks, and McDonald's, to name a few.
Many of them did this with unique products, strong brand images, and highly shareable ads (think Hollywood-style commercials with a great story, character, or message behind them).
So how do you build a product that has the potential to go viral?