Another one from the antiquities of 2008 – this one about a Fast Company look into the rage about Silicon Valley startup Ning and the “Viral Loop,” what Ning CEO Gina Bianchini and Fast Company writer Adam Pennenberg attribute for the success of internet giants Facebook, eBay and Amazon.

The article starts off with a dubious cover and title, “This CEO has Silicon Valley Buzzing.” The obvious response from anyone familiar with the male-dominated web startup zone is

“Duh. With a profile like that, how could she not demand attention?”

That comment however has a sexist ring to it, so I’ll give the story its due credit, despite some (what I feel to be) bad framing.

I’m going to assume that by now most of you reading this article are familiar with Ning (for clarity’s sake, the social platform which has been used to build sites such as smallerindiana.com).

The business model of Ning is part Facebook, part Wordpress. Network owners have the option of hosting their ad-supported networks on Ning servers, or pay $20 / month to have more control and host it locally. At the time of the article’s publishing, Bianchini commented how Ning would move from a Google supported ad environment to one managed internally by Ning.

To date, Ning hasn’t switched to their own ad network, despite impressive growth in its networks and users. More important to advertisers however, is the relative activity level of those users compared to when they signed up for accounts, some of them just kicking Ning’s tires before retreating to other venues.

More interesting was the article’s allusion to the “Viral Loop” or the social phenomenon by which services like Facebook, Hotmail, MySpace and Youtube have all experienced exponential levels of growth in recent years and become the power houses that they are.

In May 2008, Ning forecasted having 4 million networks running their web software by the end of 2010, and serving up billions of daily page views by the popularity of those networks. At the time the article was written, only 110,000 networks had been started. In October 2009, Ning had 1.6 million networks serving 36 million users.

My feelings surrounding Ning’s potential success could be described as dubious at best, as the startup’s success calls on the mindset of an activist, and one very major factor in users choosing it above all others:

Lack of a better option

Creating your own Ning platform is an easy-enough feat, but so is creating a Facebook Fan Page, Myspace or LinkedIn group, not to mention the dozens of other less-popular, more specific networks. Ning’s growth model demands that there be as many as 4 million proactive users who feel passionately enough about their topic of choice to start a network of their own. Viral loops aside, that’s a tall order.

But it’s been done before. Hotmail went from 0 to 30 million users in 30 months, simply adding a line at the end of its users e-mails advertising free accounts. Youtube did similarly with embed codes and sharing options for its users. But Ning is relying on already-active users to generate new networks at a rate which a little staggering. (usage figures here) The question for Ning’s success is clear, how will it inspire 4 million people to start their own network (this by the end of 2010)?

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