GR: This is worth considering and finding ways to implement. I've long believed that user-led acquisition is key to achieving scale efficiently. If you rely too heavily on FB/Google, your acquisition costs scale as fast as, or faster than, your business—it's a treadmill.

K-Factors revolve around the idea that your current users attract more users, creating product virality. The question is, what methods can we implement to increase the K-Factor rates in the apps we're building? I believe you'll find the following interesting.

Customer acquisition today is a bit of a contradiction.

On the one hand, it’s never been harder to grow. Apple’s App Tracking Transparency changes have decimated acquisition, leading to ballooning CACs and deteriorating measurement; ATT lopped $10B off Meta’s business alone. There’s an entire generation of paid marketing-heavy startups from the 2010s—think: DTC brands and consumer subscription apps—that simply wouldn’t work today.

On the other hand, it’s never been easier to go viral. TikTok popularized an algorithmic feed that untethers content from a follower graph. The For You Page is egalitarian: if your content is good enough, you can blow up overnight. A video that takes 10 minutes to create might garner you a million impressions. Virality is there for the taking, but it takes a savvy marketer to seize it.

I’ve been thinking a lot about k-factors recently. The k-factor tracks the number of new users that each user brings. When the k-factor is greater than 1, the product grows virally. You can see in this chart that small changes in k-factor lead to massive differences in growth. 1.1 and you’re golden; 0.9 and you’re dead.

There are also huge difference between 1.1 and 1.2, 1.2 and 1.3, and so on. Take a look:

A 20% change in k-factor leads to 6.8x more users after 10 time periods. That’s the power of compounding.

How can you create and maintain virality? For many startups, a referral motion makes sense here. Incentivize your customers to bring other customers with a cash bonus, a reduced price, or a premium feature—people like free stuff. In a tough CAC environment, and with Big Tech bigger than ever with built-in distribution, k-factor becomes paramount. Every company should be maximizing k-factor.