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Virality & Network Effect

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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.

Published in: Marketing
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Virality & Network Effect

  1. 1. Virality & Network Effect Piyush Gupta | ProductCamp Silicon Valley | March 14, 2015
  2. 2. Retention Modeling In Scope Network Effect Virality
  3. 3. Engagement Platform Not in Scope Retention
  4. 4. Let’s begin!
  5. 5. Virality – User Growth
  6. 6. Network Effect – Value growth with User Growth
  7. 7. Network Effect ≠ Virality Virality ≠ Network Effect
  8. 8. Confused?
  9. 9. Benefit is realized by each party that is directly involved
  10. 10. “But often times third parties to the exchange also either benefit or incur a cost even if they are not directly involved.”
  11. 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. 12. My Neighbors benefit – Positive Externality!
  13. 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. 14. My Neighbors pay – Negative Externality!
  15. 15. Positive Externalities create Network Effect
  16. 16. PRODUCT User Lifecycle 1. Acquire users Acquisition 2. Users to stay Retention Engagement 3. Users to continue using
  17. 17. Acquire Users 2. Advertising 3. Partnerships1. Press/PR 4. User (itself) Communicate / Word of Mouth Acquisition Channels
  18. 18. User 2. Digital 3. Via Product1. Manual Cheap Cost Inherent Channel Communication
  19. 19. User Like Invite Dislike No Invite Immediate After X days = Conversion Signup Not Interested :: Conversion
  20. 20. Virality Coefficient V.C. = Conversion / Users Reached
  21. 21. No. V.F. Reality 1 0.15 – 0.25 Sustainable 2 0.4 Very Good 3 0.7 Outstanding Web Consumer Products
  22. 22. Virality is not It is Science Random. Magic. Luck. linkedin.com/in/piyushgupta | twitter.com/gpiyush | com.gmail@gpiyush

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