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and the second:
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if you didn't read my braindumps #1 and #2 for viral loops -- here they are:
and the second:
BRAINDUMP ON VIRAL LOOPS #3 ok -- so here's the case against all the fun/dumb viral techniques you're seeing on social media right now. When people talk about "going viral" these days the state of the art -- if you can call it that -- is a hodgepodge of shitpoasting and social media videos. This includes: - ragebaiting and shitpoasting by startups - beautifully shot cinematic launch trailers - tiktok video clipping - billboards for social media coverage - influencers astroturfing your app - founders turning themselves into influencers - etc etc These are fun, but I predict they will not stand the test of the time -- not the way that classic viral techniques like referral programs, sharing links, invites, and so on have proven themselves over multiple eras. One quantitative way to talk about this is -- do these techniques scale signups as a function of active users? That is, if you tracked this as a ratio: new users / daily active users ... would you be able to scale new users as you scaled daily active users? If not, naturally, new users will stay constant and even with strong retention, your DAUs will grow linearly but not exponentially. One core reason is that these techniques generate one-time traffic. Good for creating a single spike of new users in your app. However as you grow and need a repeatable source of user acquisition, you simply can't repeat these over and over again. If you drop in an amazing cinematic launch once a year, people may pay attention but if you start doing it monthly and then weekly, there's just diminishing returns. Similarly there's no defensibility in shitposting. If you shitpost and other founders shitpost, eventually you just won't stand out as much anymore. As your customers acclimate and become less responsive to the novelty, these techniques will fade over time. But! But! I admit they are still useful Here's why. (But allow me to diverge to a short history lesson here from the Web 2.0 days) The end of Web 2.0's virality In my previous brain dumps on the Viral Loop topic, I talked about how during the Web 2.0 days (~2005-2010) there was insane innovation in email invite loops, content sharing, virality, Facebook apps that went from zero to millions of users overnight, etc. Then it ended. What killed it? Mobile did. The "golden age" of viral loops was possible because for the first time during the Web 2.0 era, there was so much novelty in getting an email or notification from a friend who is inviting you to something or sharing a piece of content to you via an app, etc. This made response rates very high, viral factors were able to go >1, and you saw a ton of products grow overnight -- including Facebook, Linkedin, YouTube, Spotify, Pinterest, and many other products that got their start with clever viral loops. In the golden era this is where you saw hyper-simple hyper-viral products succeed. In the earlier part of the era, you had apps like BirthdayAlarm in 2001 (h/t Michael Birch, later the creator of Bebo) which would email you about a friend wanting to keep track of your birthday (how kind!), driving you to sign up, and then flipping that over to asking if you wanted to keep track of your friends' birthdays. Put in a bunch of emails or eventually import your email address book and you can now ask hundreds of friends. Repeat that over and over and you have an app that might be used by millions of people. Another example -- there were loops like Plaxo in 2002 (h/t Sean Parker, later the president of Facebook among many other adventures) that started with a friend asking if you wanted to maintain an up-to-date contact about yourself. Update the contact and then it asks you to add your friends and maybe a bunch of your other friends' contacts kicking off the loop again. Many of these were hyper simple but when they were paired with social profiles and eventually a feed, these were the underlying mechanics that eventually birthed the category of social networking apps. Importantly the Social Network category had real utility and retention and wasn't just a viral app on its own. We'll talk more about these dynamics in a second. But the golden era of Web 2.0 virality eventually ended. Consumers got used to these techniques, response rates went down, spam filters kicked in, and importantly the whole world moved to mobile. When email virality was dominant, you had the ability to ask users to import their email contacts and often you'd get 200+ emails that could then be invited to the service. Before the Law of Shitty Clickthrough kicked in, you might get something like the following: - 50% of people would connect their contacts - 50% of people would invite friends - 200+ invite emails would be sent - 10% would open/click through - 50% of people would sign up - ... then repeat This would often generate viral factors of >2 or more (just multiple all the numbers above). But mobile was a whole other thing. Apple made mobile contacts widely available, but you have to invite numbers one by one. Who's going to do that? Response rates were high, but the # of invites was small. Some folks tried to build around this, using services like Twilio to deliver invites from the server. But that led to SMS spam, and the CAN-SPAM Act and resulting millions of dollars of fines convinced people to avoid all this. Between the platform change from email virality to SMS virality, and the declining novelty of invites, the response rates (and viral factors cratered) The era of hypersimple hyperviral apps ended here And to this day, it's basically impossible to create loops where the viral factor is >1 in the first session Retention is king for virality The modern app isn't obnoxiously hyperviral -- prompting to invite and invite, as prior generations of products did. Instead it's driven on a few components: 1) multiple top of funnel channels 2) great retention that drives virality Here's what I mean: First you need multiple acquisition channels that are diversified and can be as spiky as you want. This is where social media, video launches, press mentions, SEO, and even paid marketing techniques can all feed into your signups. It's fine if this doesn't scale or grow as long as you get some kind of consistent top-of-funnel dripping users into your product at all times. For a product like the Uber app -- when I was there -- it was something like 50% of first trips might be from paid marketing. Then 10-20% from referral programs, and the remainder from word of mouth, SEO, and so on. We'd buy activated mobile users, with broad base and untargeted advertising, for $10-20 and the math all worked. For other products, you might have a different acquisition mix depending on how aggressively you pushed paid versus SEO and so on. A high-intent product category like travel might have a lot more from SEO and referrals, since you need to be near transactions. Either way, you just need some set of top of funnel sources that work. Second you need the product to generate a bunch of user sessions, so that you can grow virality over time -- that's another way to say, you need strong retention. Oftentimes the viral factor is described simplistically, as: invites x conversion rate ... but that implies that all the virality is generated in one session. In a highly retentive product instead you get a whole bunch of sessions and you might be able to ask users to share, or invite, or refer every single time. So instead you can think of it as the following: the sum of: session 1's viral factor + session 2's viral factor + ... And I'll leave it up to an exercise to the reader but you can think of this as the infinite sum of each of the points on the retention curve of which each session can generate a little bit of viral factor. Each session's viral factor is then based on the % of users that interact with the viral features, multiplied by the resulting shares or invites, conversion rate, etc. I like to use a rule of thumb where about half the viral factor is generated in the first session and then the rest is generated in all of the sessions after. The reason for this is that in the first session the user is in the mindset of "setting up" their account. This is where you can ask them to set up their workspace and invite their colleagues or to invite their friends, etc. They're often coming in with a high degree of intent and those set up steps can generate a ton of reality. In the second or third sessions, the problem is not only has have many of the users dropped off but also they are sort of in a different mindset where they're expecting value from the product at that point. So while you can take them into viral flows, you don't have the excuse that it's for setting up. The other thing that you're seeing is that in reality apps will have multiple loops that are all generating different types of viral factor. A product like Dropbox might have several, such as: - sharing a folder with a coworker - inviting people to share - referrals program - using other Dropbox apps that have their own viral loops Each one might work at varying levels of performance but the important thing is that you might be able to convince a user to engage in all three at varying levels across multiple sessions This was the case at Uber, which I saw first-hand. People were introduced to Uber in many ways. You had loops like the referral program or you could earn dollars by inviting friends and they would receive dollars too. But you also recruited users naturally simply because you would often invite friends IRL to come take a ride in your Uber. Or engage in functionality like "Share ETA" that would expose friends to Uber, driving them to eventually download it. A product might have three or four major loops that all work in concert and are ideally all completely useful based on the context of the usage. That way you're not asking people to invite over and over again but instead there's a loop for inviting on your first session, then maybe a referral program that you introduce to them in session number two, then you might have some embedded functionality where they share some content or otherwise with friends in a later session and so on. To nerd out a bit: The viral factor is not generated by how many invites you send in one session. The viral factor is generated by the sum of all the viral features that you engage with over all of your sessions. The more loops you have, the more useful across more sessions because of great retention, the more viral your product is over time. And the more novel and exciting your product is to users (as AI products are now), the easier it is for the entire system to work together. Low retention apps need to be spammy. Sticky apps do not. Naturally if your product is highly retentive then you get many sessions to be able to ask the user to share or invite. You can have a small and unobtrusive viral sharing feature. As long as you get a large number of sessions, you'll eventually have a viral loop that's >1. On the other hand if you have a low retention product where you only get two or three sessions on average, then you'll need to be very prominent and spammy to push the user towards viral features. This is why sticky, high retention apps can be more viral over time. I remember in Facebook's early days it was amazing how less spammy they were compared to other social networking tools. While they had email invite capabilities, they existed just on the right railing of the website. Small and unobtrusive. If you didn't have any friends, it would be quite prominent but for most users it really was not a big thing to push people to invite as many friends as possible. I think this is because the product was very sticky and well made from day one and so the viral factor was gained over a really long period of time rather than some of the spammier social network competitors that had to use invites to grow but ultimately a lower retention rate and user frustration given the spamminess caused Facebook to eventually win. Is viral factor useful when it's <1? The funny thing about viral factors is that although people often love the idea of exceeding 1.0, as far as I can tell those unique windows only last in very short periods of time when there's a new platform or some new novel mechanic that ultimately allows hyper simple viral apps to succeed. Most of the time, you see viral factors that are 0.2 or 0.3 or below. This is still valuable! A viral factor of 0.2 means that when you have 1000 users sign up, you get 200 users "for free" and that discounts CAC in a meaningful way. In this way viral loops have ended up playing more of a support role because they help stretch the dollars that you're putting into marketing. A highly-retentive product will over time grow signups in proportion to the active user base even if it's not doing it in a super quick way. The "speed" of a viral loop is an important concept here. Virality may not manifest itself quickly, particularly when it's a high-retention/low-spamminess product. When viral factor is generated slowly over many sessions, you can understand why viral loops have a speed of how fast they generate invites. If you have a product that users engage with every day like a social network app, then they may send off a bunch of invites every day. This leads to an accumulating viral factor that is going to generate more sign-ups quickly. Contrast that to the referral program of a product like Dropbox, which might be high utility and you often use it in the background but you may not mess with the referral functionality more than once a month. This means that while the product is super sticky (by the way, it is -- Dropbox has signed up hundreds of millions of users), it might take years to generate viral signups simply because the loop speed is slow. In that way, viral loops can be slow, powerful, and make big userbases even bigger. And this is important particularly in later stages when you really don't want to use paid marketing extensively. In markets like consumer or prosumer where the eventual goal of an app is to sign up hundreds of millions of users, you're not really wanting to use paid marketing to buy an audience of that size. After all, 200 million users * $10/install = crazy money. Instead you'd like to get there because you spend millions on marketing but you also get a lot of organic spread. You get a discount that comes from all of your viral loops, you have SEO and ASO, etc. (And GEO, or whatever comes next in the AI era) Long live ragebaiting and shitpoasting OK so let's wrap this up -- what's going on in today's viral marketing landscape? If you believe my framework so far, it means that shitpoasting and ragebaiting and cinematic videos and so on, just serve to help generate random spikes of signups. They're not repeatable, but that's OK. But those signups are then amplified due to the nature of many of the AI tools out there. The current generation of AI tools often have a "create and share" viral loops that can amplify whatever top of funnel comes in. If you give your users a novel way to generate music, or video, or anything else using AI generative models, then naturally a high percent of users will do that. And then a high percent of users that interact with the generated result will want to share it with their friends and so that percentage will also be high. I think that's why we're seeing so many amazing highly visual AI tools becoming super viral because they not only use this "create and share" of our loop. Further, we're in the age of highly visual social media -- short form videos, embedded clips on posts, etc. And so the nature of gen AI output and what's working on social platforms is highly resonant. This means it'll spread far and wide.
if you didn't read my braindumps #1 and #2 for viral loops -- here they are:
RT @intrepid_p: Love to see Scott pushing his work for the greater good 👇
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