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Glossary
Growth loop
A growth loop is a closed system in which the output of one cycle of user or customer behavior becomes the input that drives the next cycle of acquisition, retention, or monetization — compounding growth through product-driven feedback rather than only through a linear funnel.
Why it matters
Funnels describe stages; loops describe compounding. Loop thinking forces teams to specify what regenerates demand: referrals, user-generated content, network effects, usage that creates SEO surface, or paid loops with deliberate reinvestment.
Distinguish growth loops from acquisition funnels. A funnel maps conversion stages from awareness to purchase. A loop closes the system so outputs re-enter as inputs. Funnels can exist inside loops; they are not the same concept. Reforge’s growth-loop framing (Balfour, Winters, Kwok, Chen) popularized the operating vocabulary of closed compounding systems versus AARRR-style funnels. Treat that as industry practice — related to, but not identical with, formal academic theories of feedback systems or network effects.
Example (enterprise): A B2B template marketplace designs a loop where published templates rank publicly, attract new creators, who publish more templates — rather than only buying ads into a signup funnel that ends at first purchase.
Mechanisms
- Define the value unit that cycles (user, content artifact, invite, usage event).
- Specify how outputs of one cycle re-enter as acquisition, retention, or revenue inputs.
- Measure cycle time and compounding strength; remove steps that break re-entry.
Boundaries
- Growth loop ≠ acquisition funnel; funnels are linear stage maps, loops are closed compounding systems.
- Growth loop ≠ “viral” as a vague adjective; specify the re-entry mechanism.
- Drawing a circle on a slide does not create a loop if outputs do not drive new inputs.
Related topics
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