Growth loops are closed systems where the inputs, through some process, generate more of an output that can be reinvested in the input.
This framework works to generate compounding growth by reinvesting the output of one cycle as input of the next cycle - and the loop goes on.
In financial transactions, when you deposit a sum of money in the bank, that principal grows an interest and that interest thereafter in the next period becomes part of the principal, thus generating higher interest earned in the succeeding periods.
Similarly, in the context of growing users, old users can generate another number of new users.
Attracting new users may be built in through the core product flow (organic) or gained through incentives (inorganic).
User generated content
Word of mouth
Refferal loops - users receive benefits when sharing about the product
Paid marketing loops - generate revenue from new users acquired through marketing, then reinvest the recovered marketing cost and additional revenue.
Building multiple loops within a product (e.g engagement loop superimposed with content creation loop in the case of YouTube)
Content personalization through the recommended videos feature keeps the users engaged and it encourages the consumption of more content.
On the other hand, Youtubers create content that influences and builds a community of followers.
As more videos are produced, more content can be consumed, and more subscribers are attracted - the bigger the community grows.
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