The Evolution of Product Growth: From Funnels to Loops and Science to Social Experiments

The Evolution of Product Growth: From Funnels to Loops and Science to Social Experiments

Introduction:

In the world of product growth and development, understanding how products grow is crucial for success. Funnels have long been used to visualize the customer journey, but they lack the ability to reinvest and compound growth. Enter growth loops, a new paradigm that focuses on closed systems and reinvesting outputs into inputs. Additionally, the distinction between science experiments and social experiments sheds light on the different risks and challenges each type of product faces. This article explores the shift from funnels to loops and the dynamics of science and social experiments, offering actionable advice for navigating these realms.

The Rise of Growth Loops:

Funnels have been the go-to model for understanding product growth, but they have limitations. Funnels operate in one direction, requiring constant input to sustain growth. In contrast, growth loops are closed systems that generate outputs that can be reinvested as inputs. This compounding effect leads to more sustainable growth. The fastest growing products are often powered by one or two major loops that transition over time. Measuring and understanding the power of these loops is critical for effective growth strategies. By combining product, channel, and monetization models into a single system, loops offer a more specific and difficult-to-replicate approach to growth.

Science vs. Social Experiments:

Science experiment products face technical risks and take significant time and capital to bring to market. However, once launched, they enter the public consciousness with most kinks worked out. Social experiment products, on the other hand, face less technical risk but rely on people as key components. This reliance introduces challenges in getting the right people to use the product in its early stages. The Cold Start Problem often plagues social experiments, making hype a necessary ingredient for success. Social experiments thrive on network effects, which can overcome product flaws and keep users engaged. Starting with a small niche and gradually expanding connections among participants can create the ideal environment for a social experiment to thrive.

Connecting Growth Loops and Social Experiments:

The concept of growth loops aligns well with social experiments, as both emphasize the compounding effect of reinvesting outputs as inputs. By incorporating growth loops into the development of social experiments, product creators can maximize their chances of success. The collective input from a tight core of like-minded users allows for experimentation and iteration, similar to the process in science experiments. This combination of social and scientific approaches can lead to innovative and impactful products.

Actionable Advice:

• 1. Focus on identifying and optimizing your growth loops: Understand how your product, channel, and monetization model work together in a closed system. Continuously analyze and reinvest outputs to generate sustainable growth.

• 2. Leverage network effects: When building a social experiment, prioritize creating strong network effects. Start with a small niche and foster density and connections among participants. Gradually expand to adjacent networks to maximize growth potential.

• 3. Embrace the power of hype: Social experiments often rely on hype to overcome the Cold Start Problem. Generate excitement and interest around your product to attract early adopters and build momentum. However, ensure that the hype is backed by a solid product experience to maintain user engagement.

Conclusion:

The shift from funnels to growth loops and the distinction between science and social experiments highlight the evolving nature of product growth. By adopting growth loops and leveraging the strengths of social experiments, product creators can drive sustainable growth and innovation. Understanding the dynamics of these concepts and incorporating them into your strategy can pave the way for success in today's competitive market.