Almost Viral: A Hybrid Acquisition Strategy
20bits.com
20bits.com
"The ratio of converting invites to new users is your viral coefficient, k. If this is greater than one you will see self-sustaining, viral growth.2 If the coefficient is less than one each user will bring in a fixed number of new users, but the application’s growth is still linear. "
The rate of change of your userbase can be written as follows:
rateOfChange = randomSignups - usersLosingInterest + currentUsers x viralCoefficient
If viralCoefficient > 0 and currentUsers*viralCoefficient - usersLosingInterest > 0, you've got exponential growth, not linear.
Of course this is a drastic simplification, as all of these coefficients depend on a ton of other factors that will not be constant over time.
But the point is, each user doesn't have to pull a full new user in order to see exponential growth, you just have to have some positive viral coefficient...
Using your model, let's say usersLosingInterest = 0 and 0 < viralCoefficient < 1.
How do you get exponential growth from this? Each new user brings in a finite number of additional users, a function of viralCoefficient. Call this number N.
This increases your growth by a factor of N, but it's still dependent on some outside source of users. If I acquire M users then through my viral process I get an additional M*N users total.
Another way to think about it: if your viral coefficient is less than one then the viral growth of each cohort dies out.
I see nothing exponential here. Am I missing something?
This point is mostly incidental to my two main points, though: outlining how the viral coefficient affects the cost of acquisition, and an argument for a hybrid strategy of accelerated but not viral growth.
What do you think of those points?
In fact, there's a good argument that this is a better way to grow than trying to get viral as quickly as possible.