

Almost Viral: A Hybrid Acquisition Strategy - snakelemma
http://20bits.com/articles/almost-viral-a-hybrid-acquisition-strategy/

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ewjordan
Err...the following bothers me:

"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...

~~~
jfarmer
"Growth" here refers to the size of the installed user base, irrespective of
retention. By "self-sustaining" I mean it requires no external input of users
to continue to grow.

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?

------
jfarmer
Here's the gist: the viral coefficient has a direct impact on your effective
cost of acquisition. Even if you're not "viral" increasing your viral
coefficient to 0.9 has an impact on your paid strategy.

In fact, there's a good argument that this is a _better_ way to grow than
trying to get viral as quickly as possible.

