The most successful companies have compound growth build-in. Unless they conquered their market and move on to the next larger one, their growth accelerates over time.
Jira becomes more valuable as more of your colleagues use it. As soon as it hits critical user mass (much fewer than you would think) in a company, the product develops a dynamic that pulls more users in without Atlassian having to pay for it. Paired with a Land and Expand model, Atlassian 10x’ed its stock price in 5 years.
Companies like Slack or Asana used the same models with stunning success. Asana’s stock price was on track to 10x within 5 years (it 4x’ed within a year and then dropped during the recent tech stock decline). Slack sold to Salesforce for $27 billion. All three companies built the same growth model.
At the heart of this pull dynamic are Growth Loops, self-reinforcing loops that drive customer acquisition and build the basis for compound growth by leaning on customers to drive more customers.
There are three ways to do this: growing product value, financial incentives, or social incentives. Atlassian, Asana, and Slack all grow in product value as more users come on board, which is also called product-led growth and one of the four scalable customer acquisition channels.
Growth can beget growth if you build the right mechanics. There is a special niche for companies like Tripadvisor, Udemy, or Pinterest that build growth loops on organic traffic. It’s hard to kickstart but very scalable.
Organic growth loops
Organic Growth loops work can be part of product-led growth with the unique ability that they’re reserved for specific companies and extra scalable.
An easy example is G2:
- Users come to g2.com
- They read software reviews
- Some leave their own software reviews
- The reviews improve G2’s organic search rankings
- More users find G2’s software reviews through Google’s organic search
- The cycle repeats itself
In Reforge’s framework, SEO Growth Loops are user-generated, company-distributed loops. Users generate the value but companies decide how it’s exposed in organic search. As such, SEO Growth Loops have unique characteristics that you need to understand before aiming to build one.
First, product discovery and user acquisition happen through organic search. Other than paid referral loops or product-led growth based on land & expand, SEO growth loops happen partially on Google. That also makes them more sensitive to Google algorithm updates and other SEO challenges.
Second, SEO Growth Loops drive net-new content that ranks in organic search. Without this crucial part, the loop isn’t self-reinforcing. An example is large e-commerce sites that rank in organic search with category and product pages but users buying products doesn’t create net-new content.
Third, SEO growth loops create a lot of pages that rank in organic search, sometimes millions. Indexing and content quality control become crucial. But lots of pages also open the door to scaling internal linking and SEO a/b testing.
These characteristics draw the line between companies that can grow on SEO loops or not. It doesn’t work for every company, just like not every company can hire and grow on a sales team. Every company that successfully builds SEO Growth Loops has some sort of inventory they can expose “publicly” on Google like courses, boards, or reviews. This is usually reserved for marketplaces, SaaS companies, and platforms (see SEO archetypes).
Core growth loops vs incremental growth
Not every company can build SEO Growth Loops, but SEO as a channel can add fuel to other growth loops. Growth comes in S-curves and channel optimization can draw out the middle part. Companies like Asana or Slack, for example, can build templates, content, and landing pages that add more beat per minute to their product growth loops. But they can’t expose UGC to Google and build a self-reinforcing loop.
You can combine growth loops and stack them on top of each other. Let’s take a simple example: Facebook drove users early on by making it easy to invite friends. On top of this core loop, though, Google also exposed profiles on Google, which then brought in more organic traffic. Some of this traffic converted to more users. In this case, an SEO Growth Loop is stacked on top of a referral loop.
Another good example is Miro, the whiteboard company. It has an inherent product-led growth loop because using a whiteboard alone is only half the fun, so users invite their colleagues. Over the last two years, Miro exposed more UGC on their community.miro.com subdomain, which started to drive organic traffic and probably convert a fraction of that traffic to users.
The last example I want to share is Loom, a video recording app that recently started to expose UGC in Google’s search results. Similar to Youtube, Loom videos can be helpful to users if they explain something. Other than Youtube, Loom videos are more scrappy and often consist of screen shares + thumbnail views of the presenter.
The main questions to ask when exposing inventory on Google are “what's the value for users?” and “what’s the value for creators?” For Miro, users get more boards, templates, and inspiration and creators get social capital (recognition; just like Trello). For Loom, it’s very similar with the difference that users can learn from creators and eventually might turn into creators themselves.