Growth Loops and Virality

By the end of this lesson, you should be able to: compute a viral coefficient and read it as an amplification multiple rather than a pass-or-fail test, explain why cycle time matters as much as the coefficient, and recognise that a loop is a property of your users rather than of your product.

A funnel ends. A loop feeds itself.

Everything in this track so far has been a funnel: users go in one end, some fraction reaches the other, and the process stops. A loop is different. Its output becomes its own input. Users arrive, some invite others, those others arrive and invite more.

The measurement is the viral coefficient:

$k = \text{invites sent per user} \times \text{share of invites that convert}$

For Basket, across 30,160 users who sent 7,131 invites:

Most people see 0.066 and conclude the loop failed, because the number everybody remembers is that k > 1 means exponential growth. That's true and it's almost never the useful frame, because k > 1 sustained is vanishingly rare and usually means you have built a chain letter.

Below 1, a loop is a multiplier

When k is under 1, each generation is smaller than the last and the whole series converges. Sum it and you get a clean result:

$\text{Total users per acquired user} = \frac{1}{1 - k}$

This is the frame that makes k useful. At k = 0.3 you haven't gone viral, and you have cut your acquisition cost by 30% permanently, which is a larger and more durable win than most growth projects ever deliver.

Basket's 0.066 gives 1.07x. Thirty thousand purchased users become 32,299. Modest, real, and free.