Home > business, smugmug > "Truly viral" premium web services?

"Truly viral" premium web services?

March 14, 2007

The Penny Gap post by First Round Capital that I talked about in my last post got me thinking. He had a provocative statement: “I can’t think of a single premium service that has achieved truly viral distribution.”

As I posted on his blog, I guess it depends on your definition of “truly viral” (and maybe even “premium”, which I took to mean “no free offering”), but there were two mentioned in the comments: Netflix and SmugMug.

Obviously, there’s orders of magnitude difference here, but the point remains. Netflix grew initially much by word-of-mouth using loyal customers and those bright red envelopes of theirs. They’re clearly a massive success, clearly premium, and clearly truly viral.

60-80% of SmugMug subscribers are referrals from other SmugMuggers. There’s a gray area where we don’t have enough data, hence the range, but we think it’s on the high side of that figure. We’ve had >100% growth every year, every customer pays, our subscribers are akin to religious fanatics, and we’ve been profitable since year one. Our marketing budget mostly consists of customer service costs – there’s almost no money spent on traditional marketing. (We view Customer Service, or our Support Heroes as we call them, as a marketing expense. I should blog about that sometime…). By my definition, we qualify.

So that’s two. But surely there are more and I’m just having a brain fart. Can anyone think of any others?

Categories: business, smugmug
  1. J. S.
    March 14, 2007 at 1:09 pm


  2. jan
    March 14, 2007 at 3:23 pm

    “We view Customer Service, or our Support Heroes as we call them, as a marketing expense. I should blog about that sometime…”
    please do! i wonder how word of mouth marketing works for your site. i’m working on an essay comparing the punk ethos of the early 80’s to the way web companies have tried to grow communities over the last couple of years.

  3. March 14, 2007 at 4:38 pm

    I’d put newegg.com in that list as well. Though I’m told they now have some advertising in some select markets (I actually saw a billboard once, I think it was in CT, or maybe TX.) by and large the only way anyone learns about them is word of mouth.

  4. J. S.
    March 14, 2007 at 11:28 pm

    eBay.com? PayPal? I guess PayPal sucked people in by being free at first and then giving it away partly free for some person to person transactions.

    In any case I agree on the customer support. I invest heavily in that as well and consider it important for our viral aspect.

  5. carwashi
    March 14, 2007 at 11:29 pm

    I think EBAY should be in this group. You cant do anything on their site without paying them something. They nickel and dime you more than anything else but all of their services cost you.

  6. January 29, 2009 at 10:19 am

    blogs.smugmug.com – now in my rss reader)))

  7. November 15, 2009 at 9:59 am

    This was great last time, looking forward to it!

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