7 growth loop examples — Or “Why go viral, when you could go nuclear?”
Thinking in growth loops is the most crucial mindset shift you can make.
On the 16th of July, 1945, the US tested the world’s first plutonium implosion device (a nuclear bomb) somewhere south of Los Alamos, New Mexico.
The world witnessed a level of explosiveness we just hadn’t seen before.
Welcome to the nuclear age, everyone.
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Now, what does this have to do with growth marketing?
Well, nuclear explosions and growth marketing are both driven by a very specific kind of growth:
Compounding growth.
Compounding growth occurs under specific circumstances when a single process constantly repeats itself.
In growth marketing, we call this a "growth loop”. A nuclear explosion is an excellent analogy for this process. Let me explain:
A nuclear bomb roughly works like this (sidenote: you think the NSA would review this post, because of that line?):
You pack a bunch of uranium together. Upon detonation, you shoot a bunch of neutron particles into it.
When neutrons collide with uranium atoms, the uranium atoms split
This releases energy and more neutrons
The newly formed neutrons will collide with other atoms, repeating the process…
Releasing more energy, and even more neutrons.
Within a fraction of a second, 10 more atoms are splitting, then 100, then 1000, and so forth.
Fast forward a second, and we have a nuclear explosion powerful enough to erase an entire city from the face of the earth in one sweep.
….that escalated quickly.
Crucial to understand, is that this growth is ‘loopy’: the iterating process of neutrons splitting uranium atoms and generating more neutrons drives the entire growth process.
The output of the process equals the input of the process, enabling a cycle of exponential growth.
That’s exactly what compounding growth is. It’s the same mechanism for how a virus like COVID-19 replicates.
All explosive growth is compounding growth.
And here’s the most important thing:
All compounding growth is ‘loopy’, just like a nuclear explosion.
Growth marketing is all about engineering growth loops for products or even for a company’s DNA.
To drive that point home, let us compare 7 different growth loops, from companies you will undoubtedly know:
7 different growth loops (examples):
1. UGC-SEO loop
Quora, Reddit, StackOverflow
Open platforms that encourage users to generate content. That content then ranks in SEO, and brings more users:
User creates content (e.g. asks a question, that other users answers)
Because many of these questions are highly specific, they can easily rank for long-tail SEO keywords
People search those keywords. They find the answers, and click on them
People discover the platform (e.g. Quora)
To further engage (e.g. ask a question), visitors need to create an account
New user creates more content (cycle repeats)
2. Powered-By loop
Mailchimp, Loom, Intercom, Typeform
In every free Mailchimp email, the footer says “this email is sent with Mailchimp”, which drives people that are interested in a similar service back to Mailchimp:
Nature of the product is intrinsically sharable (e.g. email, surveys, videos), or visible/embeddable on a website (e.g. Intercom, Airtable, Squarespace, etc)
Users distribute their email/survey/video/website
New people view the piece, and see that it is “powered by Mailchimp”
People that like the experience and want something similar, click through
New users sign up (and already see the value in the solution!)
Cycle repeats
3. Paid Ads loop
Squarespace, Double, DTC brands
Some growth loops are as simple as earning more money = more to spend on the acquisition channels that work.
Buy ads to distribute product or e.g. capture email signups
People buy a product / become customer
Revenue generated
Part of revenue re-invested in further advertising (cycle repeats)
4. Aggregator/review loop
Google Maps, TripAdvisor, Uber Eats, Youtube influencers
The more a restaurant receives positive reviews on a review website, the more they rise in the ranking, and the more customers they’ll likely receive. Those then might leave reviews again…
Register company with review website / aggregator
Serve customers well, and ask for 5-star reviews (or upvotes, likes, etc)
Positive signals boost company in the aggregator algorithms
New people searching on such aggregators more likely to choose company
Cycle repeats
As an aside: the venue aggregators mentioned above, benefit from this dynamic, too. A successful growth loop for venues, makes the platform more attractive (because it better sends users to the right businesses).
5. Physical presence loops
Lime, Doordash/Bolt, Airpods
Sometimes being physically present, gives free advertising opportunities. How did you first find out about Lime or other electric scooter companies? Well, because they were standing on every street corner, probably!
Launch company, often market-by-market in niche geographical area (e.g. city)
Usage drives physical visibility (scooters, Doordash delivery boxes, etc.)
People notice all the physical presence. The more presence, the stronger the impression
People try out the service
More usage drives more physical presence (cycle repeats)
6. Freemium collaborator flywheels
Slack, Figma, Trello, Dropbox
Apps designed for collaboration have an intrinsic distribution within and between teams. If you make the basic product free for everyone, it’ll distribute very fast!
Build a strong product, and make it deeply collaborative (e.g. Slack, Figma)
First user in a team wants to invite colleagues, because it makes the product experience better for them
It’s free, so very little friction for others to come join
Entire team joins
Some of those people will use the same tool within other teams/companies
New teams get “infected” (cycle repeats)
Note: only start monetization with upgrade features once most of the viral sharing has already happened
7. Enterprise sales loop
Microsoft, Salesforce, B2B SaaS
A simple outbound loop, where each new client both unlocks revenue and offers extra social proof needed to close additional clients. Most relevant for big ticket enterprise deals:
Sales people approach potential clients
Some deals get closed
Each new client brings lots of revenue ($100k+), as well as recognisable social proof
Use revenue to hire more sales people
Use social proof of existing client base to close future deals more efficiently
Cycle repeats!
– – –
So many loops!
The above are just examples: on every distribution channel there are opportunities to build growth loops. On top of that, new technologies like artificial intelligence, VR and crypto open up completely new growth loops, too.
If there’s only one thing you learn from us, we hope it’s this:
Thinking in growth loops is the most crucial mindset shift you can make.
Once you’re in that “loopy” mindset, you’ll start noticing that your perspective changes.
Where you focused before on quick wins, you now seek systematic gains.
Where you once focused on top-line acquisition, you see the role that conversion and funnels play.
But there’s one change more fundamental than any of the others:
The role of retention.
As you’ll soon discover, retention and engagement are the most fundamental drivers of growth in a loopy world.
So that’s what we are dedicating our next post to: the role of retention to drive explosive growth.
It’s for this reason that we call retention the “King of Growth”.
Stay tuned,
—Team Double