I’ve been reading a lot about viral growth lately and it’s really starting to sink in just how critical it is to achieve rapid growth, particularly of a new product and service.
I know that sounds obvious, but it was only when I started doing some in depth reading and tweaking of metrics in viral models that I realized the sheer impact it can have on your numbers.
When thinking about viral growth there are two big factors to think about:
Viral Coefficient – the number of invites sent by each customer and the percentage that then go on to convert into new customer.
Viral Cycle Time – how quickly new customers go on to refer friends
Small tweaks in both of the above can have a tremendous impact on how quickly user growth ramps up.
A quick example for you (borrowed from Lessons Learned – Viral Marketing) – working on the following assumptions:
- Initial customers: 10
- Number of invites sent out be each new customer: 2
- Conversion rate of invites into customers: 20%
- The time it takes to complete a full Viral Cycle: 2 days
After 20 days you would end up with 20,470 users.
Now run the same figures but halve the cycle time to one day and you will have over 20 million users!
It all sounds so easy right?
Well, of course it isn’t otherwise we’d all be growing our products and services like crazy. It generally comes down to a couple of things:
- You need to have a brilliant and compelling product / service. I’ve seen products grow like crazy through pure word of mouth (RuneScape is a great example of this) because they are simply brilliant and compelling to use. Rubbish products don’t go viral.
- Viral loops need to be at the heart of core features (think Facebook / Dropbox) – or at least really intelligently designed in (perhaps a bit harsh but think Zynga’s Farmville / Cityville etc.).
If you’re creating a new product or service or are trying to grow an existing one it’s worth considering how you will achieve viral growth as it just could be the key to a low left, high right story.
Below are a couple of articles that I have read recently that explain things in more detail – they are excellently written and very informative:
How to Model Viral Growth: The Hybrid Model by Rahul Vohra
Lessons Learned – Viral Marketing by David Skok
Startup = Growth by Paul Graham (Even though it’s focused on startups it still shows how important early organic and viral growth is).