We got an idea form this quora post (read last answer): http://www.quora.com/How-did-Groupon-solve-the-marketplace-startup-chicken-and-egg-problem

In our beginner days we are thinking of adding a 'Tipping Point' feature. Meaning users will be able to secure a coupon for free, however, it will only get activated once they send a secret link to two other friends and those two friends download the deal. when I think as a consumer I feel that forcing the user to perform an action (sharing in this case) is not a good practice, however, from a startup point of view we will really need people signing up.

OR our other option is that we don't tie activation of the deal with sharing but instead have a karma point system. Meaning for each friend the user influences, raises their karma points. But again...since deals are free (we don't take a cut) what would we have to offer the user in return for more karma points?