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Lisa Dziuba
Head of Product Marketing, LottieFiles | Formerly WeLoveNoCode (made $3.6M ARR), Abstract, Flawless App (sold)September 19

Great question! So the Growth loop is a self-reinforcing system, where "the inputs through some process generates more of an output that can be reinvested in the input" (Andrew Chen). In a super simplified version, the new users create a sequence of actions (steps) which leads to acquiring more users and repeating the loop.

The Growth loops can be compared and projected based on:

  • Growth Multiplier that shows how many new users can be brought from one user who entered the loop during all numbers of the loop’s cycle. It’s calculated as 1/(1-V), where V is the signups ratio between cycles. It basically shows if our loop is meaningful, compared to other loops.
  • Conversion rate (%) between the actions in the loop. When designing our loop we outline all steps in the loop with conversion between them. It allows us to calculate the exact loop outcomes.
  • Internal parameters inside the loop (based on its type). For example, the casual contact viral loop is calculated based on Branching, Time, and Ripple Effect.

Loops can be viral, content, paid, or sales.

Slack, Airtable, Figma, and Product Hunt use loops. For example, for Product Hunt: The user creates the product page → % of users launch their product on PH → % user shares Product Hunt page among the community → % people from the community registering on PH to upvote → % new people launch their projects at Product Hunt → the loop repeats. It’s a user-generated content (USC) loop, shared by the user.

I hope my answer will be useful for the community.