- K = invites per user × invite conversion rate.
- K below 1 still lowers acquisition cost.
- Cycle time sets how fast growth happens.
The formula
If each user sends 3 invites and 15% of invites convert, K is 3 × 0.15, or 0.45. A base of 1,000 users settles near 1,000 ÷ (1 - 0.45), or 1,818 users, so referrals add 818.
Where the idea comes from
Epidemiologists use a reproduction number to predict whether a disease spreads or fades. A value above 1 means each case causes more than one new case. K-factor is the same number applied to invites.
Why K below 1 still pays
Most products never reach a K of 1. A K of 0.3 still means 30 percent of your new users arrive without paid acquisition, which lowers blended customer acquisition cost by roughly the same share.
Improve conversion before volume
Doubling invite conversion is often easier than doubling invites sent, because a better invite page or incentive lifts every invite. Test the invite message, the landing page and the reward one at a time.
Will referrals compound or fizzle?
Questions about Growth Loops and Referrals
What is a good K-factor?
Most products sit between 0.1 and 0.5. A sustained K above 1 is rare.
Does K-factor include cycle time?
No. Cycle time is a separate number that decides how quickly each wave arrives.
Can B2B products have a K-factor?
Yes, through invites to teammates and shared workspaces, though values are usually lower.
Key terms
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