Growth Loops and Virality
By the end of this lesson, you should be able to: explain the difference between a funnel and a loop, calculate a viral coefficient, turn it into a growth multiplier, explain why cycle time matters as much as the coefficient, and say what changes a loop.
A funnel ends, a loop feeds itself
Most of this track has been about funnels. Users come in at the top, some reach the end, and that's it. To get more users, you have to put more in at the top.
A growth loop is different: its output becomes its own input. Users join, and some of them bring in new users, who bring in more.
Zoom described its growth exactly this way when it went public in 2019. People usually started using Zoom because a colleague invited them to a meeting. Some of those attendees liked it, became hosts themselves, and invited other people to their meetings. The loop runs on the product's normal use: to use Zoom, you invite people to Zoom.
Dropbox described the same kind of loop. Its users share files and folders with people who aren't on Dropbox yet, and that brings in new sign-ups. It also ran a referral program inside the product, and grew mostly through word of mouth, referrals and sharing rather than paid marketing.
The viral coefficient
The basic measure of a loop is the viral coefficient, usually written k. It's how many new users each user brings in.
For example, if each new user sends 0.5 invites on average, and 40% of invites turn into a new user, then k = 0.5 × 0.4 = 0.2. Every 100 users bring in 20 more.
An "invite" doesn't have to be an invitation in the usual sense. For Zoom, it's a meeting link. For Dropbox, it's a shared folder. Count whatever action exposes a new person to the product.