5 steps to design a growth loop that compounds your SaaS growth.

May 1, 2023

Growth Loops is baked into product-led-growth. The main question you ask yourself here is: How can I design my product in such a way that one cohort of users lead to another cohort of users?

In a growth loop, you reinvest the output of one cycle of the loop into the next input cycle of the loop to get more output. And increase the effects of compounding.

Here’s how Mailchimp run its $700m business using growth loops.

There are 5 steps you can follow to design your own growth loop -

1. Identify the trigger: Choose feature, a benefit, or a social aspect of your product that will motivate users to take action.

2. Define the loop: Provide a clear path for users to take action, lead them to the next loop step & engage with your product.

3. Incentive structure: Build in rewards that incentivize users to take action.

4. Optimize for virality: Financial viral loops, social loops, UGC loops, are all fair game.

5. Analyze & test: Analyze user behavior to identify key optimization areas.

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