Growth Embedded

"Retention first, activation second, acquisition last. Don't acquire users you can't retain."

Growth Loops:

User gets value → Shares with others → New users → Cycle repeats

Examples:

• Dropbox: More storage for referrals
• Superhuman: Invite-only creates FOMO
• Notion: Shared docs bring collaborators

2. Network Effects Patterns

Types:

Direct Network Effects:

• More users = more value for all
• Example: Social networks, marketplaces

Data Network Effects:

• More usage = smarter product
• Example: Recommendations, AI features

Platform Network Effects:

• More developers = more integrations
• Example: Shopify apps, Zapier

3. Referral Mechanics

Double-Sided Incentive:

Referrer gets: [benefit]
Referred gets: [benefit]
Both win: [shared value]

Tracking:

// Referral flow
generateReferralLink(user) {
  const link = `app.com/ref/${user.id}`;
  track('referral_link_generated', { userId: user.id });
  return link;
}

// Attribution
onSignup(referralCode) {
  const referrer = getUserByRefCode(referralCode);
  track('referral_signup', { 
    referrer: referrer.id,
    referred: newUser.id 
  });
  giveReward(referrer);
  giveReward(newUser);
}

4. Activation Optimization

Time to Value:

"Get users to 'aha moment' as fast as possible"

Activation Milestones:

1. Signup complete
2. Setup complete
3. First value delivered
4. Habit formed

Measure:

Activation Rate = (Users who reached value) / (Total signups)

Decision Tree: Growth Feature

NEW FEATURE
│
├─ Can users share this? ──────YES──→ ADD SHARE FUNCTIONALITY
│  NO ↓
│
├─ Creates network effects? ───YES──→ OPTIMIZE FOR VIRAL LOOPS
│  NO ↓
│
├─ First-time experience? ─────YES──→ OPTIMIZE ACTIVATION
│  NO ↓
│
├─ Repeat usage? ──────────────YES──→ INSTRUMENT RETENTION TRACKING
│  NO ↓
│
└─ STANDARD FEATURE ←──────────────────┘
   (Still track basic analytics)

Action Templates

Template 1: Referral System

# Referral Feature

## Incentive Structure
- **Referrer gets:** [reward]
- **Referred gets:** [reward]
- **Both benefit:** [shared value]

## Implementation
```javascript
// Generate referral link
const link = generateReferralLink(user);

// Track shares
track('referral_shared', { 
  channel: ['email', 'social', 'link'],
  userId: user.id 
});

// Track conversions
track('referral_converted', {
  referrerId: referrer.id,
  referredId: newUser.id,
  timeToConversion: timestamp
});

// Reward both
giveReward(referrer, 'storage_upgrade');
giveReward(newUser, 'welcome_bonus');

Metrics

• Link generation rate
• Share rate
• Conversion rate (clicked → signed up)
• Activation rate (signed up → activated)
• K-factor (viral coefficient)

### Template 2: Activation Flow

```markdown
# Activation Optimization

## Time to Value
- Target: <[X] minutes
- Current: [Y] minutes

## Activation Funnel
1. **Signup** (100% of signups)
2. **Profile Setup** ([X]%)
3. **First Action** ([X]%)
4. **Aha Moment** ([X]%)
5. **Habit Formation** ([X]%)

## Drop-off Points
- Biggest drop-off: [identify]
- Why: [hypothesis]
- Fix: [solution]

## Implementation
```javascript
// Track activation milestones
track('activation_milestone', {
  milestone: 'profile_complete',
  userId: user.id,
  timeToComplete: seconds
});

// Identify where users drop off
if (!completedSetup(user, 24hours)) {
  sendReminderEmail(user);
}

### Template 3: Growth Analytics

```markdown
# Growth Metrics Dashboard

## Acquisition
- New signups: [X per day]
- Channels: [organic, referral, paid]
- Cost per acquisition: [$X]

## Activation
- Activation rate: [X]%
- Time to first value: [X] minutes
- Drop-off point: [step in funnel]

## Retention
- Day 1: [X]%
- Day 7: [X]%
- Day 30: [X]%
- Retention curve: [improving / flat / declining]

## Referral
- K-factor: [X] (viral coefficient)
- Referral rate: [X]% of users refer
- Conversion rate: [X]% of referred sign up

## Implementation
```javascript
// Track key events
track('user_activated', { userId, timestamp });
track('user_retained_day7', { userId, timestamp });
track('referral_sent', { referrerId, channel });

## Quick Reference

### 🚀 Growth Checklist

**Acquisition:**
- [ ] Referral system implemented
- [ ] Viral loops identified
- [ ] Share buttons prominent

**Activation:**
- [ ] Time to value < 5 minutes
- [ ] Onboarding optimized
- [ ] Aha moment clear

**Retention:**
- [ ] Usage triggers implemented
- [ ] Email/push notifications
- [ ] Habit formation designed

**Analytics:**
- [ ] Cohort retention tracking
- [ ] Funnel analysis
- [ ] Attribution tracking

---

## Real-World Examples

### Example 1: Dropbox Referral

**Incentive:**
- Referrer: +500MB storage
- Referred: +500MB storage
- Both win: More space

**Result:** 35% of signups from referrals

---

### Example 2: Superhuman Activation

**Time to Value:**
- < 2 minutes to first email sent
- Guided onboarding
- Keyboard shortcuts taught early

**Result:** 90%+ retention

---

### Example 3: Notion Network Effects

**Growth Loop:**
- User creates doc → Shares with team → Team joins Notion → Creates more docs → Cycle repeats

**Result:** Viral growth in teams

---

## Common Pitfalls

### ❌ Mistake 1: Optimizing Acquisition Before Retention
**Problem:** Leaky bucket - users leave as fast as they join
**Fix:** Fix retention first, then acquire

### ❌ Mistake 2: No Viral Mechanics
**Problem:** Every user requires paid acquisition
**Fix:** Build sharing into core features

### ❌ Mistake 3: Slow Activation
**Problem:** Users drop off before seeing value
**Fix:** Get to aha moment in < 5 minutes

---

## Related Skills

- **zero-to-launch** - For building growth into MVP
- **metrics-frameworks** - For measuring growth metrics
- **exp-driven-dev** - For A/B testing growth features
- **user-feedback-system** - For improving retention

---

## Key Quotes

**Gustaf Alstromer:**
> "Retention first, activation second, acquisition last. Don't pour water into a leaky bucket."

**Casey Winters:**
> "The best growth loops are built into the product, not bolted on."

**Elena Verna:**
> "Acquisition is a tax on poor retention."

---

## Further Learning

- **references/yc-growth-playbook.md** - Complete YC growth frameworks
- **references/referral-examples.md** - Successful referral programs
- **references/activation-patterns.md** - Onboarding best practices
- **references/retention-strategies.md** - Building habit-forming products