Leverage the virality of your platform and get your users to acquire more users for your product.
Viral Rate, Viral Coefficient, or K Factor is responsible for the growth of multiple SaaS companies.
The generally accepted definition says that viral rate is when individual users refer your software to other people, teams, and companies. Some may ignore the referral, while others may give your software a try.
That’s the viral rate or coefficient formula:
Here’s an example:
Here’s what we have:
The viral rate or coefficient is 1.3
The benchmark says that everything above 1 is a good viral rate. This number means that you’ll gain an additional one user from each existing user.
However, there’s an accuracy problem with this formula. We like to have control over the numbers. However, product virality doesn’t work this way.
Let’s take a virtual event platform as an example. Imagine there’s a virtual event gathering over 1,000 professionals. The attendees knew about the hosting platform before the event. But thanks to their great event experience, some will check the platform and maybe try it when organizing their own events.
How do you evaluate the Viral Rate in this case?
You see, Viral Rate is not about referrals only. Your users may not purposefully refer your software to anyone. But they may share your platform link or dashboard with others to get a job done. Subsequently, these connections may like your software and give it a try.
If you aren’t asking your new users how they discovered your platform, you’ll never know whether they were acquired through your existing users or not.
The Viral Rate highlights the power existing users have to share your software with other people and get them interested in your product.
📓 Viral Rate: This term refers to the number of users your existing users acquired (purposefully or not).
📓 Network Effect: Some professionals interchangeably use Viral Rate and Network Effect terms. They’re different, though. According to Andrew Chen, a general partner at venture capital firm Andreessen Horowitz:
The Network Effect happens when the number of users on the platform is crucial to its value. In the case of a virtual events platform, the value of the software doesn’t increase proportionally with the number of attendees. It stays the same whether it hosts 10 or 1,000 attendees. However, the platform will get exposure, and maybe some of the attendees will want to use it for their events.
Your Viral Rate depends significantly on how much your existing users expose your software to external stakeholders who are out of your reach. These people can be your users’:
By leveraging the virality of your product, you’ll be able to:
Loom users may share video messages exposing the platform to their:
As a result, some of these contacts may get curious about Loom and try the platform.
(Personal story) I’m using Cal as my meeting scheduling tool. I once sent my calendar link to someone. After a while, this person told me he didn’t know about Cal, but it seemed a nice alternative to Calendly, and he’ll give it a try.
Miro collaborates with different types of consultants. The company has a special Consultant Plan dedicated to people who use online whiteboards for their consultancy sessions. The Plan includes unlimited guests, which means that consultants can collaborate on the online whiteboard with an unlimited number of clients. As a result, Miro gets exposed to the consultants’ clients, who can be:
Subsequently, these people may decide to give Miro a try and become users/customers.
I first heard the Viral Rate term when listening to an interview with Johnny Boufarhat, founder and CEO at Hopin, the fastest-growing startup. As Boufarhat said, Hopin grew thanks to its virality, and its viral rate played an essential role in attracting investors. Countless companies and brands run events on Hopin. As a result, they’re exposing the platform to a large number of attendees.
Companies may invite freelancers to collaborate on a project on Notion. Professionals may share a Notion product with industry colleagues, unintentionally showcasing the platform. Maybe even you discovered Notion only because someone shared a project with you. And that’s virality at its best.
Riverside allows you to record podcasts inside a virtual studio. As a result, some of your podcast guests may become interested in Riverside and try it.
Under the Case Examples category, we may include any other product that is:
📒 Create a product people will use as an interface to interact with others. It can be anything, from scheduling tools and in-app chatbots to learning management systems and product release software.
📒 Enable collaboration via your platform. It can be anything, from commenting to editing.
📒 Make it easy for your users to share your product dashboard or interface with others. For example, it can be an easily-generated shareable link.
📒 Your platform or dashboard should communicate your brand (logo, font, colors, design).
📒 Make it easy for your users’ connections to create their accounts from the shareable link they’ve received.
📒 Start a referral program from day one. Incentivize your users to promote your software.
► Quick note: Don’t rely on referral programs to grow, though. As Yaagneshwaran Ganesh, award-winning marketer and Head of Content Marketing at Avoma, highlights, “A referral is going to be a slow growth lever for most companies in B2B. Also, a referral to become a paying customer can take anywhere from 1-5 months on average. So you cannot rely on it to reach $1m ARR and the growth beyond that.”
📒 Track KPIs focused on identifying the impact of your product’s virality. If you don’t have a referral program, ask your new users how they’ve discovered your platform.