Viral growth loops are characterized by a system where users sign up and recommend the product to their friends. Let’s look at some examples:
1. PicNic - Market expansion strategy
Imagine ordering online and having your locally sourced groceries delivered by a cute electric 🚐 at your doorstep every week. Sounds like a dream right? 😊☁️
Well, not for Dutch and German consumers across 100+ cities. PicNic is revolutionizing the online grocery market one region at a time. Their differentiation strategy combines regular delivery routes with regional expansion based on waiting lists that make routes profitable when they hit a certain threshold.
PicNic was the fastest-growing company in the Netherlands in 2019. It seems that well thought acquisition loops yield results. 📈👏
- User joins waiting list in given region
- PicNic expands to given region once threshold is reached
- User places order at a low delivery cost
- User recommends PicNic to a friend in a new region
2. Netflix - The recommendation engine
Netflix and chill 📺. It sounds effortless right? Not for Netflix. They have been working hard 💪over the past decade to grow and retain their 160 million user base globally 🌎.
Netflix's recommendation engine is among the crown jewels of the company. It even used to award one million dollars to anyone who could increase the accuracy of the algorithm by 10%.
Why did they see so much value in it? 🤔Well, because it is a great retention loop!
- Customer consumes more content
- Netflix learns about the customer’s tastes and preferences
- Netflix tailors catalogue (home and third party productions) according to wider audiences watching patterns
- Netflix recommends curated content
3. LinkedIn - The "new-user acquisition" loop
The social media network designed for the business community 🧑🏻💼👨🏼💻 grew its user base from 37 million to 660 million users across 200 countries over the past decade. I invite you to read that again and let those numbers sink in... Those figures are just crazy, right? how did they do it? Yes, you guessed right: exponential growth loops... After a lot of experimentation 👩🔬in the early days, the acquisition loop based on suggesting users to invite their contacts 📓to the platform, as proven essential for LinkedIn’s sustained growth.
- New user creates account
- LinkedIn suggests you to synchronise your account with your email list
- LinkedIn suggests connections based on your profile & contacts
- LinkedIn suggests you to invite people from your contact list to join LinkedIn
- Your contact makes a post, you get a notification (e-mail or via website,..)
- You check the post and engage
- Your contact gets a notification
- The rest is history :-)
4. Uber - Balancing Supply and demand
“Never get into a 🚗with a stranger!” My mom used to say. ☝️👩🏻 Remember the time? Well, not if you ask Uber. 40 million car rides per month just in the US. Getting a ride was never as convenient as today, all thanks to Uber. Over the past decade, the ride-hailing service completed over 5 billion rides and has over 3 million Uber drivers worldwide. Andrew Chen explains the virtuous loop that enabled Uber to attract more drivers to the platform to meet increasing demand while maintaining competitive fares. That’s what I call a balancing act! 🤹♀️
- New or returning user uses the Uber app to call for a driver increasing demand in a given location/region
- New drivers join the platform to cover the increased demand
- A given location/region increases the number of available drivers until a point of saturation is reached
- The increased availability of drivers speeds up the pickup times and lowers prices as drivers spend less time without rides
5. Revolut - Money, but better
Send money abroad for free or split a dinner bill with your friends seamlessly. Yap, that’s Revolut! 🤩
These days, the challenger bank is adding 10.000 users a day to their 10 million user base across the globe. They claim that the first 1.5 million users were acquired without any spending on marketing.
You can call it magic! 🧙♀️Revolut’s Head of Growth for UK/IE calls it Offline → Offline to Online → Online acquisition loops:
- Offline: User receives Revolut card at home in a stylish, creative package with simple activation instructions
- Offline to Online: User shares the unboxing experience on social media creating awareness for the brand
- Online: User completes registration in 1/2 minutes. Engagement is nurtured through helpful activity notifications and perks
- Online to Offline: User gets rewarded by signing up new users