A viral loop precisely describes steps and characteristics that make a service popular. When , Facebook  Hotmail first launched, it contained “Get your free email at Hotmail” line in its footer. That led to an explosion in user growth. Some companies offer referral incentives to users for inviting other users. For example, Dropbox offers every user 500MB of free space as a   referral incentive.  Early on it grew its users and engagement numbers through the photo tagging feature.

Good hotmail design certainly helps. During the alpha/beta stages, if you have decided to build inherent virality within your product,  understand the mechanics of a viral loop  and consider introducing entry points for potential users while minimizing any barriers to entry.