Hello learners!
Welcome to the 29th lesson of the series 30 Days of PM by Crework! Today, we will be talking about Growth Loops, a self sustaining growth tool used by products, specially the consumer facing products.
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What is a Growth Loop?
Loops are closed systems where the inputs through some process generates more of an output that can be reinvested in the input. There are growth loops that serve different value creation including new users, returning users, defensibility, or efficiency.
For example: The driving force behind Pinterest's growth is the following loop:
User signs up (or returns)
They activate you on the product with specific/relevant content
You save new content or repin existing content which gives Pinterest quality signals
Pinterest distributes the quality content to search engines
A user finds the content via search engines and either signs up/returns (see step 1)
Or, let’s think of this newsletter that you all read everyday.
User subscribes to 30 Days of PM
They post about starting their journey with us on Twitter
Twitter user sees the tweet and gets curious about it and visits our website
This new user subscribes to 30 Days of PM (back to step 1)
I am not even surprised when new people subscribe to us daily without us doing any sort of marketing, because the growth loop is already there to do its job.
Loops Provide Sustainable Compounding Growth
Loops force you to answer “How does one cohort of users lead to another cohort of users?” You focus on how you reinvest the output of one cycle of the loop into the next cycle of the loop to get more output. This creates a compounding effect that is more sustainable.
Not all loops are created equally. You'll be tempted to draw a ton of loops for your product, but what that typically means is that you just have a ton of low-powered loops that aren't sustainable. The fastest growing products are typically powered by 1- 2 major loops that transition over time. Measuring and understanding the power/health of your loops is critical to understanding where to focus.
Day 29 - Completed ✅
Congratulations on completing the 29th lesson of the series. 🥳
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