A Talk with ICQ’s Yossi Vardi

March 21, 2005 · 8 comments in Miscellaneous

I had a remarkable breakfast with Yossi Vardi, whose son and three friends started Mirabilis the Israeli software service that gave the world ICQ and invented Instant Messaging.

We are using ICQ as one of a few illustrations of the power of word-of-mouth engines. It took them 25 months to get 25 million downloads.  Now, Firefox has done it in less than three. Things are just getting faster.

Today, ICQ  has 360 million downloads. Even after AOL bought it for $287 million, a dime was never spent for marketing.

I’ve interviewed Yossi before and he’s always good for great quotes from him. He’s one of the brightest and most open guys I know and this time was no exception.

He pointed out that his native Israel has produced three major brands, that have more than 350 million users: The Bible, Christianity and ICQ.  All three used word-of-mouth marketing to achieve popularity. It took the Bible (Old Testament) 2700 years; Christianity 2000 years and ICQ less than 10 years.  The difference: Technology improved the tools.  "The Internet is word-of-mouth on steroids," he said.

Vardi pointed me to research that says that conversations are #1 form of human entertainment, over story-telling.  That’s why we lay down a book or stop watching TV when the phone rings.

Yossi also pointed me to Emory University Prof. Gregory Burns who has done research that reveals when release the same brain chemicals when they are collaborating as when they are having sex or gambling. "We are hot-wired to collaborate, "says Vardi.

We are also profiling Firefox.  Robert and I interviewed Joe Hewitt on Saturday and are waiting for Blake Ross, the 19-year-old wizard to get back to us with answers to some additional questions.

We are also going to look briefly at other examples of companies who used word-of-mouth to wildly succeed.  Skype, Kazaa and Napster come to mind. 

Got any others?

{ 8 comments }

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Sean March 22, 2005 at 11:55 pm

here's another one: http://www.betfair.com – created a liquid market for 'sports betting' only possible due to internet (both medium of transactions but also very fast propagation needed in order to create the critical mass of users that a market needs to work…)

Shannon Clark March 21, 2005 at 4:01 pm

A few that come to mind that may be less than obvious:

- Craigslist – classic case of no advertising, massive word-of-mouth

- LiveJournal – again little to no advertising, wildly successful within certain demographics (not perhaps with corporate/business bloggers)

- Spring Street Networks – some online advertising, but highly successful online personals via distributed network of networks

- JDate – there are also other niche examples but JDate is the one that comes to mind as being probably very success, yet limited/no advertising

- Match.com – some advertising but also massive word of mouth

- Ebay – yes, they have been advertising, but most of their growth was not advertising driven. Related to them, PayPal, again with only minimal advertising.

- a "big" business example that might be a possible counter example or a great case study – Scion. The new car label which was launched without TV ads initially and seems to be at least somewhat successful (and expanding)

- Ryze.com – online social network, profitable (I've heard at least), and grew very rapidly with no advertising (full disclosure, Adrian Scott is a friend and I was a few years ago the Chicago Events chair for Ryze.com – which was a minimally compensated role)

- clasic example that many people cite – Hotmail

- not a business site, but apparently very successful – "hotornot.com" – claims to have registered over 2 billion (with a b) votes! Not sure how many people that is, but it has to be an aweful lot. (and over 16M photos submitted)

Shannon

Eli Robillard March 21, 2005 at 2:22 pm

BlueMountain is one of the classic "viral" examples. You may want to differentiate between P2P networks with central dependencies vs. those which are truly distributed. Those with central dependencies (e.g. Napster) are much less resistant to attack than those which follow a truly decentralised model. "Resistance to attack" is as important as "meeting a common need" in the success of a meme.

On a related note, in the following you will find the three criteria for a pandemic; it doesn't contribute to the above so much as provide some interesting background: http://www.news-medical.net/?id=4513

And though they advertise, the success of some schoolyard fads like marbles, yo-yos, hula hoops, Pog, and Pokemon cards is so far beyond what would be expected from the advertising as to be in their own class. The original Walkman and now the iPod have similar success rates.

The ability of a company to scale is also rarely touched. A documentary on Wendy's restaurants showed that their "Where's the Beef" campaign was so successful that the restaurants weren't prepared for the increased flow, and there was a large backlash of complaints and dissatisfaction that saw many of their stores close.

Take care,
Eli.

Andrew Sullivan March 21, 2005 at 10:57 am

I don't recall ever seeing an advertisement for Google or any of its services (search, email, etc.).

Angie March 21, 2005 at 9:10 am

There are now many IM applications out there, but the one I will always keep is ICQ. I have had my number memorized for over 5 years now.

/pd March 21, 2005 at 8:45 am

Shel: Not sure if BuzzAgent fits this catogory, but they do use a blog for Buzz.

effy March 21, 2005 at 7:40 am

there are many more, but to find the wide spread successful ones is rather hard. I would add to your list BitTorrent or BitComet, aside for an amazing innovative technology they have too become a globally accepted standrad with no marketing

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