OPINION: Personal recommendation can make or break a new business

Larry Page and Segey Brin were graduate students at Stanford University with a shared fascination for computer algorithms and, as the rumour goes, an initial strong dislike for each other. They developed increasingly complex internet search engines in the computer labs. Eventually they decided they had a superior product and spent most of 1998 looking for funding. But investors were sceptical - search engines like Yahoo and Lycos were well established, with a clear first mover advantage. On September 8, 1998, with just under a million dollars of funding from friends and family, Page and Brin launched google.com from a garage in Menlo Park, California. The name was a derivative of 'googol', one of the largest numbers in maths.

Around this time in England, Stephen Pankhurst was getting his wife, Julie, pregnant. The change in her status combined with extended periods of time with nothing to do led her to wonder what her old school friends were up to. Her husband and his business partner Jason Potter had been looking for business ideas that would work on the internet and, at Julie's insistence, he created a web site called friendsreunited.co.uk. Wary of involving outside investors, Pankhurst and Potter funded the site themselves.

By July 2000 the site was live.

It is at this point that the disparate tales of Google and Friends Reunited become very similar, because both of these power brands were built through word-of-mouth recommendation. Budgetary constraints and industry inexperience meant that neither set of entrepreneurs followed the traditional route to a major ad campaign, PR blitz or even internet promotion. Instead they relied on the oldest form of promotion possible: customers who were so delighted with the service that they told another and another and another.

And each of these customers followed suit. Eventually, in the case of both companies, the flood of visitors created media interest and soon both were receiving awards and lots of media attention.

The rest is history. Friends Reunited attracts between 15,000 and 20,000 new customers every day and is about to be sold for a multi-million pound sum. Google drew 341 million visitors to its UK site in 2002, an astonishing 28% of the British web audience. It is no coincidence that both brands also share an astonishingly fast growth rate. While more formal methods of marketing communication often vie with each other for the accolade of 'most influential medium', the truth is that the most effective, influential, fast-working, and economical way to promote your brand is through your customers. They have the ultimate source credibility, they automatically target and position your message for you, and as they do all this for free the CPM is pretty hard to beat.

Most of us will never get the opportunity to market products as advanced as Google or as unique as Friends Reunited. As a result word of mouth is often a much more elusive commodity. For most marketers, the challenge is to stimulate or simulate our customers' conversations. And that will be the subject of next week's column.

Tell your friends.


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