This presentation provides - Fundamental understanding of concepts like Virality & Network Effects. - Insights into what metrics to chase and why? - Relevance of Metrices and achievable numbers. - How Product Managers/ Growth Hackers/ Entrepreneurs can leverage these concepts to achieve rapid scale.

1. Virality & Network Effect
Piyush Gupta | ProductCamp Silicon Valley | March 14, 2015

2. Retention
Modeling
In Scope
Network Effect
Virality

3. Engagement
Platform
Not in Scope
Retention

4. Let’s begin!

5. Virality – User Growth

6. Network Effect – Value growth with User Growth

7. Network Effect ≠ Virality
Virality ≠ Network Effect

8. Confused?

9. Benefit is realized by each
party that is directly
involved

10. “But often times third parties to the
exchange also either
benefit or incur a cost
even if they are not directly involved.”

11. I pay a security guard to keep an eye on my premise
My neighbors may also gain a benefit of safety even though
they aren’t directly involved and haven’t paid for the service.

12. My Neighbors benefit – Positive Externality!

13. I lease my premise to a local rock-band for practice
My neighbors may bear a cost of Noise Pollution without any
compensation.

14. My Neighbors pay – Negative Externality!

15. Positive Externalities create
Network Effect

17. PRODUCT
User Lifecycle
1. Acquire users
Acquisition
2. Users to stay
Retention
Engagement
3. Users to continue
using

18. Acquire Users
2. Advertising
3. Partnerships1. Press/PR
4. User (itself)
Communicate / Word of Mouth
Acquisition Channels

19. User
2. Digital
3. Via Product1. Manual Cheap
Cost
Inherent
Channel Communication

20. User
Like
Invite
Dislike
No Invite
Immediate After X days
= Conversion
Signup Not Interested
::
Conversion

21. Virality Coefficient
V.C. = Conversion / Users Reached

22. No. V.F. Reality
1 0.15 – 0.25 Sustainable
2 0.4 Very Good
3 0.7 Outstanding
Web Consumer Products

23. Virality is not
It is Science
Random.
Magic.
Luck.
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