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Growth Loops vs Funnels

In short

A funnel needs you to keep pouring in new users. A loop uses today's users to bring in tomorrow's. The best growth teams think in loops.

A funnel is a linear path from awareness to conversion; a growth loop is a self-reinforcing cycle where the output of one user's action becomes the input that brings in the next (e.g. referrals, user-generated content).

The purple blob waters a young mango tree with small saplings sprouting from fallen mangoes.

Think of it like this

The mango tree that plants itself

Buying a mango every day is a funnel: money in, one mango out. A mango tree drops fruit, some seeds sprout, and in a few years you have more trees. Each round of output feeds the next round of growth. That's a loop.

Watch it happen

Two ways to picture growth

Funnel

Linear: visit, signup, buy
Each stage loses users
Needs fresh traffic to keep going

Loop

Output feeds new input
Users create, share, invite
Can compound over time

Use funnels to find where users drop off. Use loops to find what makes growth feed itself.

The big ideas

What you need to know

Sharing loops

A user shares content, friends see it, some join and share too. Common in social and content apps.

Content loops

Users create pages that search engines index, which brings new users who create more pages.

Paid loops

Revenue from customers pays for ads that bring more customers. Works if each customer earns more than they cost.

Funnels still matter

Every loop has funnel steps inside it. Fixing a leaky step speeds the whole loop.

Save yourself the pain

Common mistakes

Oops

Only buying more ads when growth slows.

Do this instead

Look for a loop in the product itself, where existing users bring new ones.

Oops

Drawing a loop that doesn't actually close.

Do this instead

Check each arrow with data. If shared links never bring signups, it's not a loop yet.

Your mission

Map an app's loop

~25 min

Quick check

What makes something a growth loop rather than a funnel?

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 funnels or loops.
3Learn why loops tend to compound while funnels need constant new input (ad spend, etc).