vs. Sermo
Doximity
Free daily tools: messaging, fax, Dialer
- What it did
- Secure messaging (2011), eFax used regularly by 25% (2014), Dialer (2016), video at COVID
- Sermo
- A discussion forum for hard cases; about one comment per member per year (2016)
Growth Loop
What is a Growth Loop?
A growth loop is a cycle in which using a product brings in the next users: one user's activity, such as an invitation, a shared file or a public page, reaches new people who sign up and do the same. A funnel needs fresh input at the top; a loop feeds itself.
Also calledgrowth loops (Reforge)viral loopflywheel (Bezos)
How Growth Loop works
Each turn of the loop starts from something an existing user does. A LinkedIn member sends invitations; each acceptance adds a member and a connection, and the new member sends invitations of their own. LinkedIn sent more than a billion invitations in 2010 and, in the second half of that year, added a million members every 10 days, mostly by word of mouth.
The output of one cycle is the input of the next, so growth compounds without paid acquisition doing all the work. Procore's loop runs through job sites: collaborators on a customer's project become customers themselves, about 40% of its new customers in the first half of 2023.
A loop is a product mechanism. At scale it can become a network effect or a data advantage, but it isn't a moat until rivals can't run the same loop.
A member joinsFree professional profile
Sends invitationsMore than a billion sent in 2010
A contact acceptsA new member and a new connection
The new member invitesThe cycle starts again
Each new member restarts the loop
How companies won with Growth Loop
From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.
vs. HomeAway · 2012-24
Airbnb
Two-sided liquidity with guests arriving direct
- What it did
- U.S. sales level with HomeAway 2012-14, then twelvefold growth 2013-18
- HomeAway
- Still led U.S. resort markets (2016); per-booking fees added late (10% option Oct 2013; 5-9% traveler fee 2016) angered owners
vs. Monster · 2003–10
Viral growth on free membership: every invitation adds a member and a connection
- What it did
- An accepted invitation makes a connected member
- Monster
- No invitation loop: the pool grew by active seekers posting resumes (2003)
vs. PlanGrid · 2014–23
Procore Technologies
Collaborators become customers, who invite the next project team
- What it did
- Project managers carried Procore to new employers ('our best salespeople have always been our customers')
- PlanGrid
- Grew through App Store search, a free trial and a same-day sales call
Also tagged: Robinhood · SurveyMonkey · Tableau
Growth Loop vs. Customer Referrals and Collaboration & exchange network effects
| What it is | How to tell it apart | Example | |
|---|---|---|---|
| Growth Loop | A cycle where product use brings in the next users | New users arrive through something existing users did in the product | LinkedIn invitations |
| Customer Referrals | Existing customers recommend the product to new ones | A person chooses to recommend; in a loop, use itself exposes the product | Robinhood's referral waitlist |
| Collaboration & exchange network effects | Each added user makes the product more valuable to the others they work or trade with | Value rises with users; a loop only adds users | Slack's shared channels between companies |
How to tell if a company has it
- Name the step that reaches new peopleAn invitation, a shared file, a public page or a collaborator added to a project.
- New users repeat itPeople who arrive through the loop go on to bring in others.
- It accounts for real growthA documented share of new users or customers came through the loop.
- Compare with paid acquisitionThe loop lowers what the company spends to add a customer, or rivals had to buy the same growth.
Who names it
| Author | What they call it / where it appears |
|---|---|
| Reforge / Kwok + | Growth loops (vs. funnels) |
| Bezos / Collins + | The flywheel |
| NFX | The nucleation of a network |