EXCERPT: 'Viral Loop'

PHOTO The cover for the book "Viral Loop: From Facebook to Twitter, How Todays Smartest Businesses Grow Themselves" is shown.

Web 2.0 companies YouTube, eBay, Twitter and Flickr are examples of a "viral loop," according to journalist Adam L. Penenberg. With technology, a business can start with next to nothing and achieve wealth very quickly. It begins with creating something people want and making them happy so they'll spread the word to their friends.

Startups, nonprofits and corporations can all harness the power of technology to create a viral loop, writes Penenberg in "Viral Loop: From Facebook to Twitter, How Today's Smartest Businesses Grow Themselves."

Read the excerpt below, and then head to the "GMA" Library to find more good reads.

CLICK HERE for the video "The Power of a Viral Loop."

Tupperware and Ponzi Schemes — the Original Viral Models

Party Plans, Referral Networks, and Sizzlemanship

Half a century before anyone heard of Facebook or MySpace, and Silicon Valley was famous for prunes, Tupperware, the kitschy plastic food-storage-container company, was tapping into vast social networks of women to gen-erate a massive viral loop. It all began in the midst of the Great Depression, when Earl Silas Tupper was inventing all sorts of trivial contrivances—from the sublime to the outright kooky. There was the nondrip ice-cream cone, the fish-powered boat, plastic eye shields for dyeing eyebrows, fake fingernails in red, blue, gold, and pearl, plastic garter hooks to hold up stockings, "Sure-Stay Hairpins," and a "corset with muscles" to give women faux flat tummies. A tree surgeon until he declared bankruptcy in 1936, Tupper created the "Knee-Action" Agricultural Harrow and the Gypsy Gun, a pump that sprayed creosote to rid trees of gypsy moth eggs. He designed a medical device for the nonsurgical removal of the appendix "thru the anal opening" and an instrument he claimed would kick off "menstruation in women who have delayed monthlies or who are pregnant." Somehow he found time to produce flour sifters, dish rack pans, knitting needles, a tampon case, a portable necktie rack, a self-standing toothpaste-and-shaving-cream dispenser with self-closing cap, and the "Kamoflage comb," which was a combination nail file and comb dressed up as a fountain pen. None of these sold particularly well, and if it weren't for a greasy, smelly, rubbery chunk of black polyethylene "slag," the name Tupper would have faded away.

During World War II, that slag, a by-product of smelting, was cheap and plentiful, while resin—the core ingredient of most plastics at the time—was scarce and expensive. The U.S. and British militaries used polyethylene in radar installations and to insulate cables. Tupper, who worked at a plastics factory in Leominster, Massachusetts, creating prototypes for DuPont and sealing gas masks with plastic filler, figured he could make something out of it. One day in 1942, he discovered something quite remarkable. When stripped to its essence, this malodorous chunk of petroleum waste emerged as beautifully translucent material unlike any plastic of its day: it was un-breakable, flexible not brittle, and it didn't chip or retain odors (even vinegar or onions). It handled extreme heat and cold, and when squeezed, it sprang back to its original shape.

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