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Written by Alexander Hipp


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Building a Growth Machine

A digital product that grows its user base by itself. Sounds like a dream, doesn't it? Precisely this is the goal of growth loops. Where years ago everyone was optimizing funnels, today's product teams fuel growth loops (or sometimes also called flywheels).

At Beyond, we are using the method from day one. Our loops are still getting started, but I would like to introduce the technique and share some insight into how we expect them to work for us.

I first heard about growth loops as a better way of describing a product's growth efforts a few years ago by Casey Winters and Brian Belfort. I always had the feeling that measuring impact and growth with a funnel somehow always missed a lot of different things. For example, if you look at funnels, you always get linear growth. If you get 100 people at the top of the funnel, you will have less than 100 at the end. So you optimize for the top of the funnel to get more people in. All consecutive steps after that are mainly focused on getting the users to the next step. At the final stage, you are happy that at least a few people made it through.

If you look at the product you are building and optimize based on a funnel, you optimize for getting users through that funnel. If you optimize for a loop, you improve every step to create a meaningful output that can generate more input in the form of new users.

In the case of Beyond, we optimize for two loops: 1. Growth loop to acquire more potentially interested users, and 2. A hooked loop to make sure that users are getting recurring value from using the application. We haven't fully built all the necessary parts for the wheel to spin themselves, but we're using the loops method to deeply inform our thinking and product roadmap.

For us, the primary interaction that will fuel our loops is the action of curating a piece of content. On one hand, it provides valuable content that can be discovered by existing users and potential users via search or social channels. On the other hand, it allows curators to get feedback (clicks or interactions) from other users on how valuable they found the content item. Curating more and better content for others makes a curator more interesting for the community. It allows her to establish a following and potentially earn money.

At the moment, optimizing for this main action to fuel both loops is our primary goal. It needs to be as easy as possible for users to fulfill this action with whatever content they want to recommend and to be able to add their insights and take-aways.

If we would measure the same flow as a straight funnel, we would purely measure the single conversions that lead up to the curation action as the end goal.

Furthermore, funnels are often times very business-focused in terms of what the individual steps are. On the other side, Loops can be much closer to a user's natural workflow or jobs-to-be-done. In most cases, a funnel would reach its goal when an action has been fulfilled. For the user, this action is just the beginning, and the motivation for doing the action is deeper rooted.

For example, sharing a post on social media. With a funnel, you measure the action of someone sharing the item. It doesn't take into the equation why a user wants to share the post on social. Mainly for reputation building. And this is only fulfilled when other users can discover the post and interact with it. In a loop, interactions then again lead to feedback to the person posting, whose credibility and reputation increase, leading to sharing more.

Loops can be used for everything and are in 99% of the cases the better way to improve a digital product's growth wheel. We are at the very beginning of building out our loops. But having them visual and as a core input for our product strategy, we can be sure that we're building the product in a way that will support itself as soon as we've hit PMF.

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