Virality Challenges

by Kara Yu

We’ve seen a lot of companies struggle to achieve viral growth: Aardvark, Triangulate, Cake. What’s going on? Does LTV have a skewed sample, or is it hard to harness viral growth?

It’s rare at HBS for us to see failures, but in LTV, we were fortunate to see not only one but several cases where a little bit of founder exuberance and false positives resulted in a lot of work on a product was not inherently viral. In all these cases, the founders created a product that they thought they would

Aardvark had issues with its product/market fit. While I was always a fan of Aardvark and thought it was a great idea to connect users with experts in their social group, it seems like most people thought otherwise. Even though it was popular with initial users, it was never able to cross the chasm. Ultimately, Aardvark solved a problem that users did not have. Some people found it helpful, but no one found it crucial to their lives. Aardvard also made assumptions about people’s tendencies to give back to a community, and share information. By not adequately using lean startup methodology for its customer development process, Aardvark had created a great product that people did not need. The virality of this product was way overestimated because people just did not find it useful.

Cake also had a great idea in a market that was ripe for innovation. While a similar product achieved great popularity (mint.com), growth for Cake stagnated. Even though Steven been diligent about getting validation from industry experts and top Angels, he neglected to receive feedback from his most important audience about the actual product. While conceptually, the idea was great, implementation depended a lot on the user interface. Due to his focus on the backend and neglect for the front end, the product was just simply not useful.

In the end, while virality is very difficult to predict, there is a necessary but not sufficient condition that in order to achieve virality, the product has to be either “cool” or useful to the user. I would never recommend anything to my friends that they don’t find useful. While I am a huge fan of Buzz and Google Latitude, I never mentioned them to my friends because I knew that they wouldn’t have appreciated them. People tend to only make product recommendations that improve or at least maintain their social standing with their friends. Dropbox managed to keep fairly low CAC because it was able to be useful enough to users that they told all their friends. The benefit that both parties received (in terms of extra storage) was a great motivator but had it been a less helpful product, it would not have mattered.

In short, virality is hard to achieve but at least in the cases of Cake and Aardvark, the main problem was product market fit and not their word of mouth marketing strategy.

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