EXCERPT: 'Viral Loop'

Oct. 19, 2009— -- 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."

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.

Back then, American consumers were wary of synthetics. Plastic buttons cracked, tortoiseshell eyeglasses warped when laid too close to the radiator, Christmas toys broke out of the box, combs' teeth snapped, shower curtains putrefied into sticky clumps, and mixing bowls smelled like oil refineries and split, shattered, or peeled. The public's view was well expressed in The Plas-tics Inventor, a 1944 Disney cartoon starring Donald Duck, who bakes a plane from melted plastic and takes it out for a test spin. It works perfectly?.?.?.?until it rains and the plane turns into a gooey mess.

Tupper christened his discovery "Poly-T: Material of the Future" and by the end of the war, his factory churned out a steady stream of plastic mer-chandise. He was fielding orders from American Thermos Bottle Company for 7 million nesting cups, from Camel for three hundred thousand cigarette cases, and from Canada Dry for fifty thousand bowls to offer with its soft drinks. Time magazine estimated his annual revenue at $5 million. The Mu-seum of Modern Art in New York included two of his bowls in a special exhibit of useful objects. House Beautiful dubbed his designs "Fine Art for 39 cents."

Poly-T should have been ideal for food storage, except Tupper didn't have a lid to fit his thin-lipped containers. Before the 1940s, most American families had iceboxes; then came electric refrigerators, putting the ice-making industry out of business. To retard spoilage, consumers stretched shower caps over leftovers, which left an unpleasant aftertaste, or wrapped them in tin foil. It took a while, but Tupper, modeling his airtight seal after the inverted rim of a paint can, filed a patent application for an "Open Mouth Container and Nonsnap type of closure" on June 2, 1947, and Tupperware was born.

By 1949, Tupper's fourteen-piece "Millionaire's Line," composed of bowls and tumblers, was available at Bloomingdales, Gimbels, and Detroit's J. L. Hudson, at the time the tallest department store in the world. Despite a national media campaign that included newspaper ads, magazine articles, and prominent department store displays, sales of his eponymous tubs were disappointing. Consumers didn't know what to make of the "Wonderbowl" in pastel shades of blue, pink, and pearly white. They fumbled with creating an airtight seal to "lock in freshness," and some, complaining the tops didn't fit, even returned them, according to Bob Kealing, author of Tupperware Unsealed. A lot has happened since the late 1940s, when Tupper's business was in danger of being tossed out like a Chinese take-out carton, to today, when 90 percent of American homes own at least one piece of Tupperware and the company reports billions in revenue.

Tupperware's unlikely savior was Brownie Wise, a single mother from Dearborn, Michigan, who worked as a distributor for Stanley Home Prod-ucts, a direct seller of detergents, mops, household cleaners, and floor waxes. In 1948, shortly after Tupper introduced his product to stores, Gary McDonald, a young salesman working for Wise, was browsing J. L. Hudson when he realized these plastic containers would be ideal for home demonstration. He could see that customers didn't buy them until someone demonstrated how to put the tops on, then explained that they were for food storage and that leftovers wouldn't spoil. You could even toss a sealed bowl in the air and not a drop of salad dressing would spill. "Yank it, bang it, jump on it," they said. What's more, the product had no natural competitors other than zippered "grease-proof, stain-proof and mildew-proof" plastic bags, which were sold three bags for $1.98 at hardware stores, compared to the three-piece Wonder Bowl set, retailing at $1.39.

McDonald brought a sample to Wise, who at first didn't know what to make of it. She had never seen a bowl you could squeeze, and she had a hell of a time getting the lid on, accidentally knocking it off the table. To her surprise, it bounced instead of breaking, which would become one of her marketing mottos. After spending a couple of days trying to figure out the magical vacuum seal, she realized "you had to burp it like a baby." Wise added Tupper's wares to her product line.

The thirty-four-year-old Wise had gotten her start with Stanley Home Products when a salesman knocked on her door and botched his sales patter. I could do better than that, she thought. Because her secretary job at Bendix Aviation Corporation barely covered her ailing son's medical expenses, she moonlighted evenings and weekends. Within a year she became one of Stan-ley's top earners and quit her secretarial job. The secret of her success: "patio parties," where she peddled household wonders like the ashtray with a brain, Atomite ("the cleaner with ATOMIC like action"), and truckloads of Tupperware.

In the years leading up to and following World War II, there was a gra-dual shift toward modernity. Technology had been screaming forward for more than fifty years—the invention of electricity, the automobile, the air-plane, the light bulb, the telegraph and telephone—there was even talk of flying to the moon, and the United States was ready to reap the benefits. Colonizing space was a theme of comic books and radio shows like Flash Gordon. In 1938 Orson Welles's radio broadcast of War of the Worlds, based on H. G. Wells's sci-fi novel, set off panic as rumors of a Martian invasion swept through some communities, multiplied by the sheer force of word-of-mouth distortions. The theme of the 1939 World's Fair was "The World of Tomorrow." It featured a special exhibit called Futurama, which envisioned Earth twenty years ahead. In the span of two decades—from the 1930s to the 1950s—airplanes like the Lockheed Vega, which Amelia Earhart crashed into a watery grave, went from being constructed of little more than wood, glue, and baling wire to sleek steel jets; television was replacing radio as America's favorite entertainment choice; the acoustic big band swing era gave way to electric rock 'n' roll; medical advancements yielded a cure for polio; and psychologist B. F. Skinner postulated that people could be conditioned into creating social utopia. Earl S. Tupper's "Poly-T: Material of the Future" fit in perfectly.