The dangers of viral growth

By December 23, 2013Uncategorized

Pandodaily just published an analysis of The 20 most viral companies of the last decade. Only six of them are deemed ‘winners’ in the sense that they are still valuable properties today. Several more of them had good exits before ultimately flaming out, so in a way they won, but not in a way that is very replicable. So the big takeaway here is that, seductive as it might be, a spurt of amazing viral growth and becoming everybody’s darling often doesn’t get you very far. More important is to deliver real and enduring value to customers.

To get on the list companies had to have a short and distinct period of very rapid growth (this excluded Tumblr and LinkedIn which grew steadily for years), and to have enjoyed substantial PR and raised significant capital as the next big thing. Here’s the full list (I would probably order it differently and have included Facebook):

  1. GroupOn: Loss column
  2. Instagram: Win column
  3. Myspace: Loss column
  4. Pinterest: Win column
  5. Twitter: Win column
  6. Glam Media: Loss column
  7. Snapchat: TBD
  8. Slide and RockYou: Loss column
  9. Digg: Loss column
  10. Youtube: Win column
  11. Viddy: Loss column
  12. Second Life: Loss column
  13. Fab: Loss column
  14. Bebo: Loss column
  15. Buzzfeed: Win column
  16. OMGPOP: Loss column
  17. Ning: Loss column
  18. Groupme: Win column
  19. turntable.fm: Loss column
  20. Chatroulette: Loss column
  • https://twitter.com/#!/gentschev Greg Gentschev

    It’s always fun to quibble with these lists, so here goes. I agree that Facebook should be included. Also, the definition for the list is silly. LinkedIn and Tumblr certainly qualify. How about Vine? Zynga should be on the list as well, perhaps as a provisional win. I would argue that GroupOn qualifies as a win ($8 billion company currently).

    Viral growth is a huge boon. How many companies failed that didn’t achieve viral growth? My takeaway is that virality is incredible, but it doesn’t spare you from poor execution on other fronts or the lack of a sustainable business model (most of these). So I basically agree with you.