## Definition of Growth Loops Growth Loops refer to the process of creating a self-sustaining system that drives continuous growth in a product or service. It is a [[product framework]] introduced in the book "Hooked" by Nir Eyal and is based on the idea that successful products are those that create a habit-forming loop for users. ![[Pasted image 20230410134704.png]] ## How Growth Loops Works The Growth Loop framework consists of four stages: - trigger; - action; - variable reward; - investment. The trigger refers to the initial action that prompts the user to engage with the product. The action is the behavior that the user takes to interact with the product. The variable reward is the incentive the user receives for taking the action. The investment is the effort the user puts into the product, creating a loop that leads to continued engagement and growth. ## Types and Exaamples of Growth Loops There are three types of Growth Loops as outlined in the "Hooked" book: ### Viral Growth Loop This type of growth loop relies on users inviting other users to the product or service. It works by providing incentives for users to share the product with others, leading to a snowball effect of increased user adoption. Examples of this type of growth loop include social networks and messaging apps, where users are incentivized to invite their friends and contacts to join the platform. ![[Pasted image 20230410134821.png]] Examples of Viral Growth Loop: - Dropbox. Dropbox offers a [[Referral Mechanics]] that incentivizes users to invite their friends to use the service. When a user invites a friend and that friend creates an account, both the user and their friend receive additional storage space for free. This referral system has been a significant factor in Dropbox's growth. - TikTok. TikTok's algorithm promotes content that is most likely to be shared, liked, or commented on. This approach has led to a viral loop where users create and share content, leading to increased [[Customer Engagement]] and [[User Acquisition]]. - Uber. Uber's referral program incentivizes users to invite their friends to use the service. When a user invites a friend and that friend takes their first ride, both the user and their friend receive a discount on their next ride. This referral system has helped Uber to grow rapidly. ### Paid Growth Loop This type of growth loop relies on advertising or paid promotions to attract new users. It works by allocating a portion of revenue to advertising or promotions, which in turn drives new [[User Acquisition]]. Examples of this type of growth loop include search engines and e-commerce sites, where advertising is used to attract new customers. Examples of Paid Growth Loop: - Google Ads. Google Ads allows businesses to advertise their products or services through targeted ads that appear in Google search results. The ads are pay-per-click, meaning the advertiser pays only when a user clicks on their ad. - Amazon Advertising/LinkedIn Ads. Amazon Advertising allows businesses to advertise their products on the Amazon platform. Advertisers can target specific audiences based on their search history and purchase behavior. LinkedIn Ads allow businesses to advertise their products or services to targeted audiences on the LinkedIn platform. Advertisers can target audiences based on job titles, industry, and other demographic factors. All of these approaches have helped to generate significant revenue. ### Sticky Growth Loop This type of growth loop relies on creating a habit-forming experience for users. It works by providing a product or service that is so valuable and engaging that users keep coming back for more. Examples of this type of growth loop include social media and gaming apps, where users are incentivized to return to the app regularly to engage with their friends or to complete various challenges. ![[Pasted image 20230410134731.png]] Examples of Sticky Growth Loop: - Peloton. Peloton's fitness app offers personalized workout plans, social features, and real-time performance tracking. These features have created a sticky experience where users are motivated to continue using the app to reach their fitness goals. - Duolingo. Duolingo's language learning app offers personalized lesson plans, gamification features, and social elements. These features have created a sticky experience where users are motivated to continue using the app to learn a new language. By understanding and optimizing each stage of the Growth Loop, product managers can create a product that continually attracts and retains users. This approach helps to build a loyal customer base and can drive long-term business success and when used correctly, can lead to sustained and significant growth for a product or service.