Viral Loops

Introduction

“A startup is a company designed to grow fast… The only essential thing is growth. Everything else we associate with startups follows from growth.” – Paul Graham

And a startup’s potential to achieve exponential growth and rapid scale is best achieved through creating a viral loop. 

High growth startups do not solely rely on strong marketing budgets and PR. They need viral marketing strategies that power growth from within. They need to design growth that accelerates with usage. Finally, they need to create the hooks and motivations that will enable and incentivize users to expose the offering to others, every time they use it.

What is a viral loop?

A viral loop is a sequence of user actions that 

1. Enables existing users of a platform to expose the platform to new users on an external network, through mechanisms like referrals, content shares, etc., and 
2. Enables these recipient users to convert to becoming users of the platform, and starting the loop all over again.

How do viral loops work?

A viral loop consists of four key actions: Send, Spread, Click, and Convert.

 

 

1) Send: Maximize outflow of content from the platform

The platform should constantly – and explicitly – promote the creation as well as the spread of new content. As more producers create and share from the platform, new cycles of viral growth get started. Producers need to be encouraged to create new content more often. Moreover, sharing actions should be a part of the creation workflow, where relevant, to ensure that new creations are shared. Instagram’s creation flow clearly demonstrates the importance of this, seemingly simple, design principle. 

It is equally, if not more, important to identify triggers that lead consumers to share the content that they consume. 

 2) Spread: Ensure that content spreads on the external network

The next priority for the platform is to maximize the spread of the content on the external network. To a large extent, this spread is determined by the design of the external network. Facebook’s Share, Twitter’s Retweet and email’s Forward functions make content easily spreadable within these networks. However, spread on another network, say the blogosphere, may not be quite as frictionless. Hence, a network’s ability to encourage spread of content may be a key consideration when choosing an external network. 

 3) Click: Maximize clicks on external network

This requires the platform to incentivize conversions through testing different pitches and calls to action. A/B testing multiple messages may yield different results, and may help the platform to zero in on the right messaging. 

4) Convert: Minimize cycle time

Virality works as a cycle with a sender sending out content, the receiver clicking, visiting the platform and eventually converting to the original sender, and starting a whole new cycle. The longer the time this cycle takes on average, the slower is the growth rate of the overall platform.  

Further reading: Viral Growth: How PayPal, YouTube And StumbleUpon Gained Rapid Traction Through Piggybacking

Viral loop examples

Let’s look at a few examples of companies that created compelling viral loops to scale. Consider the viral loop for YouTube. 

After uploading their video on YouTube, creators share the video on Facebook, Twitter and other social channels. Video viewers on YouTube may also share videos they find provocative. Viewers on Facebook/Twitter further share/retweet the shared video, creating greater spread. Some of the viewers who find their way back to YouTube start consuming more videos on YouTube and some start creating videos as well. Both viewers and creators kick start subsequent viral loops.

 

In its early days, this viral loop was kickstarted through an integration with MySpace. Read more about that and YouTube’s early story here. 

Linkedin is another such example which integrated with Microsoft Outlook’s email address book to allow its users to send out invites to their professional connections, thereby kickstarting the viral loop..

 

Most highly viral platforms and apps focused on integrations with external networks to ride the activity on these networks. 

Instagram provides another good example. 

Before it became a social network, Instagram’s app allowed users to take pictures and share them on Facebook. Visitors from Facebook would then sign up and start creating new content on Instagram. In this manner, Instagram rode Facebook’s activity to create a competitor, using this viral loop.

Tiktok’s viral loop

Short form video sharing app, Tiktok has a similar content-driven viral loop as well. 

Let’s look at some other examples to illustrate this further.

Patreon’s viral loop

Patreon is a platform that allows content creators to earn recurring revenue from their fans.

Content creators start a Patreon page hosting their creations and promote it to their fans via multiple channels. Fans may promote the page further using their social handles. Recipients on these external networks visit the creator’s Patreon page. Some of them may be content creators themselves and sign up on the platform to start their own Patreon page and repeat this loop.

 

Survey Monkey’s viral loop

Survey Monkey is a Saas application that allows users to create surveys, quizzes, and polls for their online audience. 

Users create and share their surveys over email, blogs, and social channels. Survey recipients visit Surveymonkey to complete the survey and some of them may start creating surveys of their own, thereby kicking off the viral loop all over again.

 

Kickstarter’s viral loop

Kickstarter is a crowdfunding platform allowing project creators to raise funds from their fans and followers.

On Kickstarter, a project creator creates a project page with details about their product and incentives for funders. The platform further acts like a referral marketing platform by allowing project creators to offer incentives, such as discounts, that encourage other users to get the word out about their campaign. 

The project page is shared with their fans and followers, who may amplify it further on their respective social channels. Some of the fans who visit Kickstarter to fund or learn about the project may create their own projects on the platform as well, thereby ‘kickstarting’ the loop.

 

Substack’s viral loop

Substack is an online platform that provides publishing infrastructure to support subscription newsletters.

Substack allows users to send an email to a mailing list and publish that email as a post. This directly enables spread over email lists but also allows readers to share the original post on social media As the email is forwarded further and the published post gets amplified on social media making Substack a referral marketing platform. The body of email and post often includes a call-to-action asking new users to sign up for the newsletter. Some of the readers may even start their own newsletter, starting another cycle of virality.

 

Quora’s viral loop

Quora is a Q&A platform, which allows users to ask questions and connect with people who contribute answers.

The dynamic of asking a question sets a viral loop in motion. Users ask questions on Quora and share their questions on Twitter or Facebook to get answers faster. Interesting questions may get retweeted and shared further, eventually attracting users to come in and answer questions. Some of these users may ask new questions of their own and start the cycle again.

 

Gumroad’s viral loop

Gumroad is an online platform that enables creators to sell products directly to consumers. 

Much like Pateron, Gumroad allows users to create their customised storefronts and encourages the creators to share it. Fans buy products and share the page among their peer group. Since creators often buy from other creators, the viral loop gets kickstarted again, as more creators discover the platform. 

 

Dropbox’s viral loop

Dropbox is a cloud-based document shared service and probably one the most successful referral programs of all time. The platform offers more storage to its users when they refer their friends. In this case, the viral cycle offers a two-way reward where both the inviting user and the recipient get access to extra storage once the new recipient signs up to Dropbox.

Rave’s viral loop

Rave is a streaming capability that allows multiple users to stream simultaneously from major content providers. Rave allows users to host and share a live streaming session with friends who then spread it further. The viral loop constantly increases the number of new users on the platform.

 

Reddit’s viral loop

Reddit allows users to start new communities or discuss, vote and share the content other users have submitted. Users, who find interesting content in niche communities of Reddit, share these pages on social media. As new users discover this content, some of them may go on to create their own subreddits and original posts and kickstart this cycle again. 

 

Camscanner’s viral loop

Camscanner allows users to scan documents from their phones and share the photo. Every shared photo includes an embedded signature/branding, encouraging new users to sign up for taking scans of their own.

Behance’s viral loop

Behance is a social network for creatives, which allows users to host their work portfolios, curate content and connect with each other. Creatives share their work portfolios among their communities and these portfolios are shared further on external platforms. Since creatives tend to network with other creatives, this sets up a viral loop in motion attracting more creatives who come on board to set up their own portfolio and curate content from peers. 

Twitch’s viral loop

Twitch is a live streaming platform for gamers, where users watch gamers play video games via live streams. Game developers use this platform as a viral marketing channel. Twitch users stream themselves live while playing video games. Viewers further share the streams of their choice with their peer groups. New users sign up on the platform for frequent live streams while some users may move on to streaming gaming sessions of their own.

Read more about creating viral loops: Infinite Virality

What is the viral effect?

The viral effect is a phenomenon where users of a platform or product leverage external amplification networks to gain further exposure for the platform or product, by sending out usage invites, content native to the platform, usage notifications, or calls-to-action for external users to join the platform and perform a certain action. 

The viral effect can be architected using the viral loop framework shared here.

How to calculate the effectiveness of Viral Loops

The effectiveness of viral loops may be determined by calculating the Viral Coefficient (or K-factor) for your product. The  Viral Coefficient is the average number of new users an existing user can acquire or generate in their lifetime as a customer/user. To know more about viral coefficient, how is it calculated, and its benefits read our deep-dive on the Viral Coefficient

Viral loop strategies

There are four types of viral loop marketing strategies based on the choice of incentives.

First, users may perform viral actions for fun, because it enhances the experience of using the platform. Turn-based games benefit from this dynamic. 

Second, users may perform the viral action for fame. This is particularly true for producers who create creations on top of the platform and spread it on external networks for social feedback. 

Third, users may  perform the viral action because it leads to greater fulfillment and because they believe in the cause. Platforms like Kickstarter and change.org benefit from this dynamic among consumers, in addition to producers spreading their creations for fame. 

Finally, users may perform a viral action because they are incentivized monetarily.

Deep-dive on viral loop strategies

Many digital platforms today, like Facebook, WhatsApp, Uber, Instagram, Kickstarter, and YouTube, have grown rapidly over the last decade, often defying traditional marketing models and adopting a viral loop marketing strategy.

Our course on Viral Loop Strategies unpacks the factors that led to the successful growth of these platform (marketplace) business models. The ideas in this course were developed through deep research of a wide range of digital businesses and through actively implementing these design considerations with entrepreneurs building their start-ups.

These ideas have been subsequently refined over the course of multiple workshops around the world over the last five years. This course aims to provide a toolkit and a set of design considerations, along with in-depth case studies, to help product managers and marketers plan out and execute towards similar non-linear, exponential growth .  

In the first Module, we explain the importance of viral growth. In Module two, we explore the common misconceptions that people have about viral loops and why these misconceptions prevent them from executing it well.

Module 3, starts exploring viral loops in detail, first by looking at the structure of disease spread and then applying it back to how digital businesses spread in a networked world.

The next 4 Modules and unpack this viral loop framework in further detail. In Modules 4 to 7, We study the design elements that constitute viral loops.

Module 8 focuses on the optimization decisions associated with viral loops. Module 9 takes a detour to explore the idea of Word of Mouth and leave out creative ways to engineer it.

Finally, in Module 10, we bring together the various elements of this framework to create a cohesive canvas that product managers and marketers can use to take decisions and execute towards viral growth.

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