In 2000, James Hong and Jim Young befriend one another while both studying electrical engineering at UC Berkeley.

As many red-blooded male college students will do, they would often hit pause on their normal, everyday conversations to ogle at a passing coed.

On one such occasion, they found themselves in a ridiculous disagreement about the “hotness” of a woman on a scale of 1 to 10.

Hong and Young knew that others had similar arguments all the time. So they decided to settle the subjective “physical appearance rating” argument once and for all.

Thus Hot or Not was born.

The two students set up a website where people could submit photographs so others could then take a poll asking them to rate the person’s appearance on a scale of 1 to 10.

The cumulative average of the rankings would then decree whether the person was “hot” or “not.”

Within a week of launching, the site had reached almost two million page views per day.

However, in the case of Hot or Not’s viral explosion, we can learn a valuable lesson.

Virality can often make – and then quickly break – an entire company.

Here’s an example of this principle at work:

The Story of the Hot or Not Viral Sensation

It was stupidly simple.

With one click, you rate the person in the photo. As a result, Hot or Not became a viral sensation virtually overnight.

While there were no invite mechanics to speak of early on, the controversial nature of the site – fueled by curiosity, vanity, and the competitive nature of its users – created the perfect emotional cocktail to drive ample online and offline word of mouth.

Almost immediately after the site launched, users began to upload their photos to see how they ranked.

If they found they ranked well, they bragged about it to friends.

If they ranked poorly, they would often upload different photos to rank higher and potentially salvage their self-esteem, asking their friends to vote to increase the average ranking.

A high rating was a badge of honor. A low rating often made people hate the site.

Both cases got people talking about Hot or Not. Which was a win for the company, any way you look at it.

But it wasn’t all good times. Their business had made one fatal error in their rise to the top.

The Slow Death of Hot or Not

To clarify, Hot or Not never faded into oblivion.

However, for a site that was one of the top 5 most trafficked sites online within a few weeks of launch, their slow fade into mediocrity was predictable.

Why?

Was it because Hong and Young mismanaged?

Did they run out of money?

Did a superior competitor immediately enter the market and take over?

No – it’s because they grew too fast.

Despite Hot or Not’s viral beastliness, Hong and Young could not implement a successful revenue model for quite some time.

They tried monetizing by tacking on ads to their site, but it was only marginally successful and ruined the clean user experience.

It wasn’t until Hot or Not pivoted towards a dating experience that they started to actually add value.

This helped because that value was tailored to work with the viral engine that was their rating game.

It was an obvious bridge.

As one person gives another person a good rating, it stands to reason that they might want to send them a message as well.

However, by the time they discovered this, they had already saturated most of their market with their old experience.

Former Hot or Not users, which accounted for millions and millions of people, only remembered the old ratings experience they were exposed to.

These users didn’t know it had since pivoted to a dating site.

As such, they had no reason to return to the site - especially since no retention strategies had been implemented early on, which is when most of the traffic had originally funneled through the site.

That said, the world was watching.

Sites like YouTube initially sprung up as a video version of Hot or Not but quickly realized that opening the video upload, embed, search, and view process was far more valuable than using it to allow users to rate the physical attractiveness of other users.

Many dating sites since have gone viral using some of the same early mechanics as Hot or Not.

Tinder is the perfect example. It’s basically a Hot or Not clone for mobile, but Tinder had a chance to inject retention and monetization into their app before release, which helped spur their continued rise.

In the pantheons of viral history, Hot or Not was a raging fire for a moment back in the early 2000s.

As quickly as that flame rose, however, it just as quickly began to die.

This led to an exit of $20 million a few years later. While this is no small chunk of change, that payout was nowhere near the nine figures they should have gotten.

The owners would very likely have earned a lot more if they had opted to sell at the height of their popularity or had they quickly injected retention tools and reengaged users that they could have later better monetized.

What’s Next

So what’s the takeaway from Hot or Not’s rise and subsequent fall?

Regarding the survival of your company, virality and good business practice are not mutually exclusive.

If you want to make money and prolong your product’s upward viral trajectory, you must implement sound business models around retention and monetization to work alongside your viral marketing efforts - and you must do it early on.

This is why knowing your “critical mass” can be very useful. I’ll explain why in our next chapter.

Are You Using Critical Mass Correctly?

The notion of critical mass can be a vague and often misused concept by businesses.

When understood correctly, it can help tell you exactly when the time is right to boost your viral marketing and avoid imploding altogether.

Follow me, and I’ll show you how.

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