carmensaksen January 10, 2019
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Explanation

What is viral growth? It is my understanding that viral growth is something that everyone wants, businesses, Instagramers, Youtubers and everyone who are trying to reach out to others. Viral growth is all about increasing you following, network and consumer group. The way to get this kind of growth is by doing something that many people are interested in and on a platform that is easily ¨shareable¨. When you have these two things you have made the base for something to go viral. This is probably not enough, you will need to start the viral ¨chain¨ yourself. This you can do by sharing it with your network on twitter, Facebook, youtube and many other social platforms. If you are a business, sharing it with your customer mailing list is a great way to reach your customers, but not for viral growth. That is because its not as easily shareable as other platforms, you can of course do this in combination with other platforms since it will make your customers talk about it. It’s probably good to note that this is not a guaranteed way to viral growth, most things that go viral are random. I think on the other hand that you will increase the chance of going viral by using network effects.

Network effects

More users=
more benefits.

A youtube
video by Aija Leiponen ( https://www.youtube.com/watch?v=gbd-93yi9vQ)
tells us this about network effects:

¨Direct network effects are when users acquire value
by other people being in the network.

Indirect network effect is when you don’t care
about there being other people, but you care about the product, application
and/or complimentary goods you get by there being other users. An example is
operating systems and applications. ¨

Positive- and negative network effects are hard to take away. When you have a positive network effect the product feeds on itself by having a large network. New users are drawn to products were there are many other users. The network effect can also influence the product in a negative way when you have few users. The product will ¨kill itself¨. People are usually sceptic to products that nobody are using, or nobody have heard about (small to non-existing network). If you want to know more about network effects you can check out this youtube video by Livewire Markets ( https://www.youtube.com/watch?v=j3h1SYeIkPQ ).

Increasing returns

Brian Arthur
says this about increasing returns in his article in the July- August 1996
issue of Harvard business review (https://hbr.org/1996/07/increasing-returns-and-the-new-world-of-business
):

¨ Increasing returns
are the tendency for that which is ahead to get further ahead, for that which
loses advantage to lose further advantage. ¨

I found
this to be both a great and confusing way to describe it. It’s confusing in the
way that its written (for me as a Norwegian at least).

Conclusion

By putting these
three explanations together we can say that by experiencing a viral growth you will
also experience a positive network effect and get increasing returns as a
result.

Check out these blog posts for more information on the subject:

Norwegian

Jenny Evensen: https://www.dig2100.no/viral-vekst-nettverkseffekter-og-transaksjonskostnader-hva-er-egentlig-dette/

Arne Krokan: http://www.krokan.com/arne/?s=viral+vekst

English

Melissa Miller: https://blog.hubspot.com/blog/tabid/6307/bid/9249/understanding-viral-growth-marketing-math.aspx

Morgan Brown: https://www.dtelepathy.com/blog/design/design-viral-growth

-Carmen