Growth Loop

A growth loop is a self-reinforcing cycle where an output of the system (like a new user) becomes an input that generates more of the same output, without requiring continuous new investment.

The framing shift from "funnel" to "loop" matters: a funnel is linear and finite (users go in one end, some come out converted, the funnel itself doesn't generate more input on its own), while a loop is circular and compounding (a referred user can refer more users, a piece of user-generated content can attract more users who generate more content). Dropbox's classic referral program — invite a friend, both get more storage — is a textbook growth loop because each cycle plausibly generates more inputs than it consumed.

Not every referral program is a real loop — if the referral rate per user is low enough that the loop decays rather than compounds, it behaves more like a modest acquisition channel than a self-sustaining engine.