The Spam Dynamic: How Most Successful Web Companies are Still Built on Email

Today Facebook adds over a million users a week, as the poster child of social networking, and companies like Groupon (which claims to be a social product but isn’t really) aim to go public while others like LinkedIn recently have gone public.

The reality is, most of the big successful consumer-oriented “Web” companies out there today are built on foundations of email, and sometimes of encouraging what some might think of as spam. There’s a fine line but let’s look at a few examples:

Facebook, LinkedIn: Both of these companies rely heavily on user-initiated email to other users for customer adoption, perhaps less so than earlier in their lives, but nonetheless, there was no tremendous organic attraction to visit the site based on advertising or great media stories about the companies, it was all about encouraging users to invite their friends. When I was at LinkedIn, I learned that one of our major growth drivers was encouraging a user to upload their address book and making it super-easy to invite new users. The strongest brand we had at LinkedIn, was that of our users — “John Brown is someone I know and if he thinks this service is great, why don’t I try it out?” — and address book uploads and the resultant email sent out turned many one-connection people into multi-friend propagators. It worked great.

Today the existing networks like Facebook, LinkedIn and Twitter with their APIs can perform the same function as the email address transfers, that of pulling user info into an application, but without the email address the system messages in these various services are really not as powerful.

This is obvious in the case of Facebook, which made a major change a few years ago to how aggressively applications could message users. Email went out the window in favor of less aggressive “inbox-style” messages, and app messages were treated as on average far less important than normal friend messages. During the time with its more permissive policies, several companies were able to take advantage and it helped them create big user bases which in turn, had their own gravity to drive other products in their stable – here I speak of course primarily of Zynga. Zynga’s ability to get viral “invite adoption” from users on Facebook was a powerful growth driver.

Groupon too, largely relies on acquiring email addresses to share its daily email updates of deals. According to their S-1, they have over 85 million email addresses today and yet only 15 million people have purchased a deal — so think about an email a day for all of those people and you’ll get an idea of how email drives this and also how they must be sending out a LOT of unanswered, unacted-upon email.

Not that that is bad per se, but anyone who discounts the power of email or argues that email is not still a major driver of user adoption should look at these examples and take heed. With email spam restrictions increasing, email will be more challenged as an adoption vehicle – but it is still the sine qua non of consumer “viral” adoption.