Stop 09 · Growth Marketing & ExperimentationTopics · 5/9

Growth Loops & Viral Mechanics

In short

A funnel ends when someone buys. A loop feeds itself: each new user brings in the next. The best products grow because using them creates more users.

Designing a product or campaign so existing users naturally bring in new ones — a self-reinforcing cycle rather than a one-time funnel that needs constant new paid input.

The blob carefully draws swirling henna patterns on a smiling friend's hand.

Think of it like this

The mehendi artist at a wedding

At a wedding, the mehendi artist decorates the bride's hands. Two hundred guests see it. A few ask for her number and book her for their own functions, where hundreds more see her work. Each job creates the next.

Watch it happen

A content loop for a recipe app

New user

Cooks

Seen

Loop

1/5A new user joins the app.

The big ideas

What you need to know

Loop, not funnel

The output of one cycle, new users, becomes the input of the next.

Viral coefficient (K)

K = invites per user x conversion rate of invites. Above 1 means each user brings more than one.

Cycle time matters

A loop that completes in a day grows far faster than one that takes a month.

Built into the product

The best loops happen because using the product naturally shows it to others.

See it in code

Walk through the code

excel

1B1  Invites sent per user        42B2  Invite → sign-up rate      15%3B3  K-factor                   =B1*B2         → 0.64B4  Starting users             10005B5  Users from cycle 1         =B4*B3         → 6006B6  Users from cycle 2         =B5*B3         → 360

1/2Four invites per user with a 15% acceptance gives K = 0.6.

With K below 1 the loop still adds users, but each cycle adds fewer. Paid or organic acquisition keeps it topped up.

Save yourself the pain

Common mistakes

Oops

Expecting a product to 'go viral' with a share button nobody has a reason to press.

Do this instead

Sharing must help the user, like showing off a result or getting a reward.

Oops

Assuming K above 1 lasts forever.

Do this instead

Loops slow as you run out of new people. Keep measuring and keep improving the loop.

Your mission

Sketch a loop and do the maths

~25 min

Quick check

Each user sends 5 invites and 10% of invites sign up. What's K?

Go deeper

1Diagram the growth loop behind a viral product you know (e.g. Dropbox's referral program).
2Identify whether a product you use grows mainly through loops or through paid funnels.
3Learn why loops tend to compound while funnels need constant new spend.