60 days startup lesson -24 - Growth Loops vs Funnels: What to Focus On First

60 days startup lesson -24

Growth Loops vs Funnels: What to Focus On First

 Find the Right Growth Strategy for Your Business. When starting a business, we often face a few important questions: Where should we start? How do we reach the right audience? How can we achieve consistent growth and sustainability? There are two powerful growth strategies that answer these questions:

👉 Marketing Funnels

👉 Growth Loops

What Is a Funnel?

A funnel represents a customer's journey — from discovering your brand to making a final purchase.

Typical Funnel Stages:

1. Awareness – The customer becomes aware of your brand

2. Interest – They start showing curiosity

3. Consideration – They evaluate whether to go ahead

4. Intent – They are ready to purchase

5. Action – They complete the transaction

📌 Example: A person sees your Instagram ad → Clicks the link → Visits your website → Buys the product.

 Key Benefits of Funnels:

• ✔ Helps track customer conversion rates accurately
• ✔ Identifies drop-off points in the customer journey
• ✔ Improves marketing budget efficiency
• ✔ Especially useful during new product launches

 What Is a Growth Loop?

A growth loop is a self-sustaining system where each new customer helps bring in more customers, resulting in natural and continuous business growth.

📈 Example:

A customer uses your service → Shares a referral link → A new user joins → Both users receive a bonus → The new user refers others → And the cycle continues.

 Components of a Growth Loop:

1. Trigger / Input – A user performs an action (e.g., shares a referral link)

2. Value Delivery – That action provides value to another person

3. Conversion – A new user starts using the product or service

4. Reactivation – The new user also repeats the referral process

Funnel vs Growth Loop: When Should You Use Which?

Choose funnels when launching a new product, aiming for structured, measurable growth, targeting a broad audience, and needing marketing control. Go with growth loops when your product allows users to invite others, spreads organically through sharing, and supports viral, self-scaling growth. The right model depends on how your product drives user acquisition and scales.

 Conclusion:

Funnels and growth loops are both powerful tools. Successful businesses often combine them, using each where it fits best based on timing, need, and product maturity. The real growth advantage lies in knowing when to switch gears—and how to make them work together.

❓Have you ever tried combining a funnel with a growth loop? What worked and what completely surprised you?

“Don’t just optimize for conversions. Optimize for experiences that lead to growth.”

— Julie Zhuo

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