Hi everyone, it’s day 11 of 30 Days of Distribution.
Yesterday, I talked about how we win when people win, and I ended on the idea that a marketplace naturally builds its own distribution loop. It’s fascinating, really. Because when you look at marketplaces, one side fuels the other. The more creators you have, the more affiliates want to sell. The more affiliates you have, the more creators are encouraged to join.
It’s that same principle that powers companies like Uber or Airbnb: more drivers attract more riders, and more riders attract more drivers. Or think of Jiji, more sellers bring more buyers, and more buyers attract more sellers. That’s the power of a marketplace loop. It’s a network effect in motion, one side’s growth feeds the other.
Now, there are many other kinds of loops we can talk about, such as social loops, product loops, viral loops, and so on. But today, I want to touch a bit on viral loops, because they’re often misunderstood.
People usually think viral loops just mean referrals like “invite a friend, get a bonus.” But that’s not always accurate. A referral loop becomes a viral loop only when it starts to grow on its own, when each new user brings in more users naturally.
That said, not all referral loops work the same way. Some are what I call forced loops. You’ve probably seen people pushed to refer others just for a quick benefit, even if they don’t care about the product. That can inflate your numbers, but the results rarely matter to your long-term goals.
And then there’s the other extreme when you tie referrals too tightly to activation. Like “invite a friend, but both of you must complete X tasks before you earn anything.” It’s not a bad idea, it helps ensure users are active, but it can also feel like homework. It’s forced activation, not organic growth.
The key is baking the loop into the product experience itself, making it feel natural, not transactional. Dropbox did this beautifully. Their referral program wasn’t just about “invite a friend.” It was tied to a real user need for storage space. You’re already using Dropbox, you need more space, so you invite friends to get it. And your friends, in turn, do the same. The loop sustains itself because it’s part of the product’s value.
That’s the lesson here. The best loops come from a deep understanding of the product experience and user motivation. If your loop only drives signups without activation, you get shallow growth. If it drives activation but not retention, you lose people after the bonus. But if it’s embedded in genuine user value, it compounds.
We’ll probably get to talk about other forms of distribution loops, social, product, and others. Because when you have solid loops in place, people start distributing your product for you sometimes without even realising it.
And that’s the kind of growth that sustains itself.
Alright, that’s all for today. See you tomorrow.
This is really a great way to think about loops. Thanks so much for these 30 days of knowledge; it's been a learning curve for me.
So on the loop topic, It seems to make more sense for B2C products, but how about B2B products? Do loops really work in this case?