Designing Growth Loops

"Growth loop modeling. So really understanding how you grow and where you should be spending your time. What acquires users? What retains them? What monetizes them?"

"We invested actually in some time to essentially add screenshot tracking... we were able to basically articulate and say, 'Okay, streak milestones is the obvious one.'... we staffed those moments with illustrators and animators and created these really delightful experiences around them, and that worked amazingly well."

"The exploring emerging channels framework that I'll take... has three core ingredients... understanding if there is an overlap between what the customers need is, what your company's goals are, and what the channel actually does really well."

"I like to spend a lot of time thinking about how they monetize. What is the monetization strategy of the channel? And the reason is because if you, as a business, can match or support their monetization strategy, it actually gives you a really interesting leg up with that channel."

"Generally I wouldn't let anything bleed past a quarter. You can probably get some good signal in a month or less, what I would call fishing. It wouldn't be like you're just putting bait in the water to figure out where the fish are, not necessarily getting statistically significant repeatable solutions."

"Seventy percent of our signups come through that viral loop that you referred to. And then, of those signups, then they're usually solo users and then they start to invite team members in and then the team starts using Calendly and then usually the head of that team either inbounds to us or we have some sort of PQL data."

"We constantly will relook at an experiment a year later, see that the way the GMV curve for the distribution was different than we might've originally thought. And that'll actually change what we do from that previous experiment. And so there's a lot of longterm monitoring of experiments over these very long time horizons to both inform what those input metrics are and more importantly hold ourselves accountable to, did we actually move what we cared about, which is that longterm GMV, in the right way?"

"What we really care about is incrementality. So incrementality is kind of the gold standards... Incrementality test is basically don't show ads on meta for certain number of people. Show it to the other set, see what the lift is and the outcome."

"Really figuring out how do you build compounding growth loops where it's not just one way of acquiring people, but you're building two and three and four ways that layer onto each other that help you to really supercharge your engine of acquiring people."

"Being able to identify the various micro and macro loops, how they're all connected, being able to document them in a qualitative model to communicate a shared understanding of how you grow, it's really powerful."

"Snyk, for example, believed very early that we could build out powerful content loops via fixed pull requests that we raise on GitHub. New users, they'll sign up for Snyk, they'll connect their GitHub accounts, Snyk will scan their code, will find vulnerabilities, will automatically create Snyk-branded pull requests to fix those vulnerabilities. Other devs in the repo will see and interact with those PRs, and some of them will follow links to Snyk, create accounts and some of them will connect their own repos, and so the loop continues."

"The best way I've found to articulate a growth strategy that fulfills the promise of usefully guiding the team's execution, it's the loop based model... Being able to identify the various micro and macro loops, how they're all connected, being able to document them in a qualitative model to communicate a shared understanding of how you grow. It's really powerful."

"Pick the hardest side is my advice. And then, how some companies do this, again, I think there's a lot of different ways to do this, but a common advice is find a way to jumpstart one side. Find a way to hack one side, play one player mode is what it's also called sometimes, but try to find a way to tap into existing channels that have one side of your marketplace already latent."

"What we did is leveraging this community and building essentially a soft onboarding supply engine where we would pay our best drivers $35 per mentor session... the mentors were our very best drivers, and they were evangelists for the brand. So, what they did was they would share personal tips on when and where to drive."

"We built a team of hundreds of account executives, and their job was just pick up the phone and call those drivers. And so, we had the same aha moment of like could we get some of our best drivers to do that for us... we called them recruiters. And so, as a recruiter, as a driver, you could just, if this was quiet on the road, you could just hop on your phone and you would have a mini sales dashboard where you could claim leads."

"The criteria I would think about is... one, the better signal is retention and depth of engagement... Number two is, there's some element of user quality and ability to monetize... The third thing to look at is... analyze what the value exchange is. What are they giving you to incentivize you to develop on their platform?"

"The goal of your Kindle strategies, these like non-scalable hacks, they only exist to unlock the fire strategies, to unlock the things that could take you to millions of users."

"If your plan is paid acquisition on top of freemium, I'd pivot right now."

"At the highest level, it's like taking a go-to-market approach where your product job is to grow revenue and you use humans as a backstop and not the other way around."

"One of the principles that guides our thinking and our strategy is give value before you extract value... we intentionally put out a lot of free software. And the idea is that this software is not sort of gimmicky... if they're engaging with it deeply enough, they're going to run into the limits of what that value is."

"Step one, you have constraints. Similar to our sandbox example of everything in the world that's orange versus everything in a construction site, you have to think about the physics of the current market, the product, the model and the channels that you're using."

"The most basic example of this would be virality. Your existing customers are referring new customers and those go on to refer new customers. Based on that coefficient, it has a lot to do with how fast your business grows. And similarly with paid marketing, as you generate contribution margin, you can reinvest that and grow and actually if you link those two up explicitly, it makes it really clear why thinking about something like payback period is a much better measure of paid marketing performance than LTV to CAC because the speed at which you get enough money back to then go acquire another customer has much more bearing on how fast your business can grow"

"Growth is a game of inches... it's really about finding the aha moments, the opportunities. And sometimes opportunities are things that seem really silly... it's really taking the core engine and actually wrapping it around the user interface around the experience, around the flows so that people can get to it faster."

"And then we also figured out these viral motions around our referral program, and shared folders. And so Dropbox started expanding virally for the first several years... we applied that same engineering mentality to these viral loops."

"I feel like only 30 to 40% of what I've learned in the last 15 to 20 years of being in growth transfers here because we just need to invest in such bigger bets, and innovate, and create new growth loops here, everybody and their mother is starting a vibe coding business nowadays, and we need to figure out how to be ahead of them."

"The only way to create a word of mouth loop is just to blow their socks off."

"This is product-led growth... to the max, supercharged. Yes, because you're literally using your product to drive that awareness by giving it away to the agents in your ecosystem that will do that distribution for you."

"As a growth team, your number one priority is to create your own or your earned channel. Channel that you've earned and that nobody else can compete in but you... It really goes into the concept of product-led growth acquisition, which means you're relying on virality, on word of mouth, on user-generated content."

"Not overlaying every single way that you can grow through product, through marketing and through sales as an evolution. Is a huge mistake that a lot of growth teams fail to iterate on and innovate on."

"Growth loops... action, reaction that generates another action and it's a self-contained flywheel they can spin."

"Where product-led growth plays really interestingly, is in the land and expand phases of the market... product-led growth, which is really good at is expand because it prompts the user to get more involved. And that's classically a Main Street play."

"There was a tipping point in April where the newsletter was growing... This was when Substack introduced recommendations, which has been a massive growth engine, and I guess being one of the top publications, I benefited from it."

"A good metric is that 40 to 50% of your new customers should ideally come from organic channels and 50% from paid. If 90% come from paid, that means at some point that the music is going to stop."

"All the initial influencers, I onboarded manually myself. I would jump on a call with each one of them so that they understood what Gamma represented, how to use the product. You want to be able to have them tell you story but in their voice. I think a lot of people think influencer marketing and they'll think these big trendy creators, people that have a million followers. This is the wrong approach. You basically give them a script to read, immediately feels like an ad. That product is not connected really to them in any way. You're much better doing the hard thing, which is hard to scale, finding the thousands of micro influencers that have an audience where your product maybe is actually useful."

"When you're early on, your mindset should almost be like you're trying to create a word of mouth machine. If you can get that part right, everything else becomes significantly easier. And if you have any, and I think this applies to both prosumer, B2C, as well as even B2B products, if you have a B2B product, even if you're not telling all of your friends, you should be telling colleagues where that product is relevant."

"We laugh whenever we hear somebody say they have a flywheel, which gives you the idea of network economies. There are often flywheels, the ones that really are material, are rare. The key thing here is materiality, not whether the flywheel exists, but whether the effect is strong enough to really tilt returns."

"I've seen a lot, and this is when I had to reset my thinking coming from a growth team joining YC, is you can't start a startup ethic with a growth team mindset because that is just scalable things all the time. And really what you need to go back to is doing things that don't scale and unscale your way of thinking about customers."

"Damian, who leads our growth team... starts talking a lot about thinking in loops. How do you make sure that when you're building something you can have the fuel in order to cascade and grow?"

"We call our internal strategy called B2C2B. All those consumers, personal user use Notion for the most simple way you can use a computer or your phone, which is note-taking or document-sharing. And then they realize, 'Oh, Notion can do more of that.'... Then they bring Notion to work. Half our B2B customers coming from prior personal users."

"Product-led acquisition, meaning the use of the product grows the product. For example, if I'm using PayPal and I'm sending $1,000 to somebody else, there is no way they will not create a PayPal account to accept the $1,000. By me trying to use PayPal in its everyday intention and me getting value out of it to settle a debt, I'm automatically enticing someone else, very strongly so, to also become a PayPal customer."

"If you have a marketplace like eBay or some marketplace for selling collectible shoes or something where you're encouraging users to create beautiful content of the items being sold, like these cool landing pages that show off the products, and they share it elsewhere, then that's an example of users making content they're sharing off platform that is useful for their own followers."

"We should not be paying for every customer and we should be very careful that people aren't getting hooked on the drug that is paid marketing or performance marketing... D2C is not dead. How you drive people to D2C, how you acquire customers, how you build sustainable businesses, that needs to change."

"The first step is join, the second is evaluate, the third is upgrade, and the fourth is expand. This funnel represents the journey of a customer in a PLG product as they advance and develop in their lifetime of using the product... expansion drives net dollar retention, it drives brand awareness, it drives more usage in more pockets of the company, it is awesome for renewal rates if you're working with enterprise contracts, and ultimately then also brings new referrals into the product that loop all the way back to the beginning at join."

"The right growth advisor can have literally company changing impact where they're either building or helping to ideate or helping to implement a growth loop that literally changes the company. As we know, you need a great product and you need a great growth loop. And it's usually just one loop that you need to get right."

"I've always thought of LinkedIn as just such a great example of this where you have this viral loop where if you recall when it was just starting, everybody was getting these invites from LinkedIn... the byproduct is when people join, they create this beautiful lightning page, which is your profile that gets indexed. It's kind of like a viral loop feeding an SEO loop that continues to grow."

"The signal is that is a good motion for you is if the product is really intuitive to onboard onto. There's a low learning curve so you don't need a human to onboard the user. Also, if there's a viral component to it, that is really what can take."

"It's a lot easier to get someone to send more invites than it is to get someone who's a little shy to even send one. So I thought it was much easier to get those people to share the product with bigger groups of folks than it would be to get someone who's just not like that."

"You need to have invites early and often so that you catch people who want to share it, are social people. And then for the people who would never participate in that, they can ignore it or skip it. But that doesn't mean that it shouldn't be all over the entire product."

"With certainty, if you're good at your job, you can make an app grow and go viral. Over the years of building all these apps, I've accrued all these growth hacks that still nobody knows about."

"We found that as a user got older from age 13 to 18, the number of people that they invite to an app just declines almost exponentially."

"To be convinced to download an app, you need to see it... three times or so. So you basically need to saturate an area with every kind of marketing you can."

"I have a whole laundry list of iOS mechanisms that people use for a certain way today, but you could invert them... Contact sync is a great example because you sync your contacts and then it finds all the friends and then ranks the people who are not on the app yet but have a bunch of friends on it."

"Virality is really when the word of mouth of a product is high quality... It's when customers market your product. And that is incredibly powerful, but also that's incredibly actionable."

"Network effects is when you create value for passive members by other people joining the network... Network effects is a feature by itself, and it's the most powerful feature."

"I think that one channel growth company is always a no-no. ... we just went back to first principles on a lot of that and also just kind of reformed a team around that and basically got an amazing team together. ... we already had really good showing in SEO and really good patriarch and SEO helped to bolster things like SEM and then eventually Facebook as well."

"Customers who convert from freemium and become paid customers, their retention is typically about 10 to 20% higher than those who converted from a free trial or converted from a traditional sales process."

"The power that new business models are exploiting is the power of the user base. What we called years ago, network effects, where the more users you have, the more useful a product is."

"The choice you're facing is, how do I take advantage of having that one side scaled to attract the other side? ... Uber... would just hand out coupons for free rides at events, parties, things like that, to take people home. And that was a way of saying, 'Hey, we're subsidizing the drivers in the city. That's our scaled side. Now we're going to use that subsidized driver base to attract riders.'"

"It is word of mouth. It is the virality you can't measure that isn't a mechanic that isn't in a feature. It is when one user spontaneously tells another user about your product."

"What if we just ask writers, who do you recommend? What if we just put that in the subscribe flow and just made it as simple as possible?... It created this goodwill viral loop, which was really interesting to see play out."

"The biggest thing that you can do is a network effect. The more I pin something on Pinterest, the better the experience for every user on Pinterest. Every time I add a pin to a board, I'm creating a new edge in Pinterest Graph, that Pinterest then uses to create recommendations and enrich their understanding of all those objects on Pinterest."

"How do you get it so that, as your users use the product, they want to share it with other people? They create metadata that you can then use for SEO. You have collaborative experiences that pull other people in. There's all different things you can do here. And then, there's also things that you can do to re-engage a user."

"I think every marketplace has to figure out what I call tipping loops. And there's two types of tipping loops that work together symbiotically to help a marketplace scale. The first are the growth loops."

"A referral program where we have incentives on both sides is the best way to go. ... it's a great accelerant when it's already working, but it can't fix it if people don't want to talk about your product."

"If you don't build the network effect into what you are making, you are almost certainly going to fail... The question is, will this work better for my users if they tell other people about it? And if the answer is no, then why would they tell other people about it?"

"The Black Loop is someone comes in, they make a doc, they share with a group of people, some subset of the people turn around and make another doc, and the process repeats itself over and over again. The blue loop is someone comes in, makes a doc, and instead of sharing it with a team or with the collaborators, they publish it to the world."

"Growth organizations are in this interesting space, they're in between everybody else. They're in everybody else's sandpit in a little bit, in a little way, and they're kind of at the edge of everybody's full-time job and they are very valuable, but they can be complicated because of all those relationships."

"For really sophisticated companies, the people who really nail this, it's about making both motions work together. If you can get a PLG motion work to feed your sales team and a sales team motion work to feed your PLG funnel when the sales leads aren't ready yet and you can get those motions into playing with each other, you can make a lot of money."

"one of the things that they did is what I call cap table as a growth strategy where they did a great job of getting a large number of early stage founders and other influential operators and advisors onto the cap table at the company."

"When you have a new network, think of it as a new country, you want the high status people and high status mean they're interesting, people want to be where they are... And there's exactly an interesting corollary that they're often underserved by other existing platforms."

"We have a growth agent... LinkedIn has a very unique... we've kind of funneled all of our unique loops, our funnels, our tests of the past, everything into this growth agent, and now you can basically rock your respect for it, your idea for it. And it would not just allow you to do it better. It would actually critique how good is your idea."

"on the seller side... it costs 20 cents to list an item... we really leaned into that as the currency for the seller referral program... If I refer them, they'll get some listing credits. It'll be easier for them to open their shop. And then when I need to list more items, I also have credits that I can apply."

"Word-of-mouth you can only have if you have high frequency of use... If you're using Waze every day, then every day you have an opportunity to tell someone else. So word-of-mouth, even though that everyone would like that, it's only going to happen if you have high frequency of use."

"If you have really healthy LTVs... then there is a big opportunity to play paid and lean into paid growth loops and paid acquisition loops."

"The first thing you look for is that, is there inherent product network effects? It's something that it's either there, or isn't from inception from my experience. I think it's very difficult to manufacture. You'd only study when... It's very hard to manufacture product network effects if they aren't there from the get go."

"I think that surprising thing to people probably is that it's also the case with some later stage companies. It's not just early stage companies that are kind of one trick pulleys. Sometimes it's later stage companies as well."

"I actually have to talk them out, focusing on diversification too early. Contrast that with some later stage companies for who are... At scale, I know 50 plus million ARR, 90 plus percent reliant on a single acquisition channel, which just mire with risk and diversification is a blind spot for them."

"We knew if we can get to the right people and we can connect the dots to them to the correct use case... they'll be able to go to their friends and say, 'Hey, I'm using Airtable as a content calendar, but you have a UX research problem. And I understand Airtable enough that I can help you build a system. And now I'm a superhero internally.'"

"PLG motion is perfect for lowering the barrier for more people to try, broader the reach. It's a kind of volume kind of game. And then the sales motion, you can have very targeted list of big customers you go after, you close them and it's a big order."

"The biggest difference from SLG and PLG is that the sales funnel traditionally work like something... Product-led funnel is different. It's much more similar to B2C. Basically you can still have people visit your website and they sign up for free version or free account or free trial. The most important thing, the biggest difference, is now you want them to use the product."

"A product-led acquisition is a great place to invest, if you have a collaboration workflow, you have some inherent, internal viral components in your products. Think about Figma, think about Calendarly even, right? It can spread. This product is so easy. You can build something to allow it to spread on its own."

"PLG makes sense for a lot of companies at the outset... The thing that folks get wrong is it does typically have a ceiling. So people are generally not going to give you $1 million via self-serve flow. So at some point if you want to sustain growth rates, you're going to have to have your deal sizes get bigger and bigger."

"One of the first things I did was always to build a growth team... when you hire the right person, they start asking all the right questions because... they are so into this experimentation side, it actually is this really easy thing to do is when you start building a growth team, it just begets all of the right questions being asked."

"In order to get hypergrowth, you have to have organic, inbound, and viral word of mouth."