Loops Beat Funnels

Loops beat funnels

Put two growth engines side by side: a funnel that buys a fixed number of users every period (paid acquisition — linear, and capped by churn) and a loop where every active user brings k more (compounding). Drag the levers and watch the crossover arrive — the exact period where the compounding loop overtakes the flatlining funnel. Runs entirely in your browser (0 uploads, works offline).

How to use it

1. Set the funnel's new users per period, the loop's viral coefficient k, and monthly churn.
2. Watch the two curves: the funnel climbs steadily then plateaus; the loop starts slow then bends upward.
3. Read the crossover marker and the X-ray — where (and whether) the loop overtakes, or why a sub-critical loop (k below churn) quietly decays instead.

What this clears up (the fundamentals)

• Linear vs exponential — a funnel adds; a loop multiplies. Adding a constant each period is linear and, under churn, plateaus at a steady state of inflow ÷ churn. Multiplying compounds without a ceiling.
• The crossover is inevitable (if the loop is super-critical) — a slower-starting loop looks like it's losing for a long time, then overtakes and never comes back. Judging growth by the early lead is the classic mistake.
• Loops have a survival threshold — the loop only compounds when its multiplier 1 + k − churn exceeds 1. Below that it's sub-critical: it decays no matter how big the seed.
• Why loops are worth more — a funnel's output is bounded by spend; a loop's output is bounded only by the market. That's why investors pay up for genuine loops and discount pure paid funnels.

Where it's used

A growth-model intuition builder — a fast way to feel why "our paid channel is bigger" isn't the same as "we'll grow faster," and to sanity-check whether a claimed loop actually compounds. It's a miatz build-lab concept playable; learn to build it yourself.

FAQ

What's the difference between a funnel and a loop?

A funnel converts a fixed inflow of new prospects into users each period — its size depends on how much you spend. A loop feeds its own output back into its input: each user generates more users, so it compounds on the base it already has.

What is the viral coefficient k?

The number of new users each active user brings per period. Combined with churn it sets the loop's per-period multiplier, 1 + k − churn. Above 1 the loop grows exponentially; at or below 1 it's sub-critical and decays.

Why does the funnel plateau?

Because a constant inflow against a percentage churn reaches equilibrium: when new users equal churned users, the total stops growing. That steady state is inflow ÷ churn — no matter how long you run it.

Is anything uploaded?

No. Both trajectories and the crossover are computed in your browser — nothing is transmitted or stored. Turn off your Wi-Fi and it still works.

Limits

A teaching model with constant k and churn and a single homogeneous cohort — it omits saturation of the referral pool, seasonality, and paid+loop interaction (a funnel that also feeds the loop). Use it to build the linear-vs-exponential instinct, then model your real cohorts.

Related

Part of the Demystify Playgrounds. Explore the rest from the Playgrounds home.

Bookmark this page (Ctrl+D, or ⌘D on Mac) — it works offline the next time you need it.