Unlocking the "Why" Code: How to Crack the Qualitative Properties of Growth Loops

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Ever feel like you're throwing marketing spaghetti at the wall and hoping something sticks? 🍝 The problem might be that you're missing a crucial ingredient: a strong "why" behind your Growth Loops.

Alright, Nerds, let's put on our lab coats and goggles—it's time to get scientific! 🧪 We're diving deep into the "why" behind those Growth Loops, those ingenious systems that can turn your business into a customer-attracting machine.

In our previous experiments, we explored the basic mechanisms of Growth Loops. We dissected those juicy quantitative properties—the hard data that tells us if our loops are firing on all cylinders. But today, we're shifting our focus to the qualitative aspects—the human behaviors and motivations that make these loops tick.

Think of it like this: We're no longer just observing the results of our experiments; we're trying to understand the underlying forces that drive them. Why do users behave the way they do? What makes them tick? What are the psychological triggers that make them click that "sign up" button, share your content, or tell their friends about your awesome product?

.Breaking down the experiment: The Variables of Growth…

Introducing the "Who," "What," and "Why"

Just like in a scientific experiment, we need to identify and understand the key variables that influence our outcomes. When it comes to Growth Loops, those variables are:

.The What: Action…

This is the observable behavior we're studying—the action that users take at each stage of the loop. Think of it as the dependent variable in our experiment. Are they signing up, sharing content, hitting that "buy now" button, or inviting their friends to the party?

Pro-Tip: There are three primary types of "What" actions, just like the phases in a classic experiment:

• Receiving Value: This is the initial stage where users are introduced to the core value proposition of your product or service. They're getting something valuable, whether it's access to information, a free trial, or a discount code.

• Generating Value: This is where users actively contribute to the loop, adding fuel to the fire. They might create content, invite others, or provide feedback—actions that benefit the entire ecosystem.

• Distributing Value: This is the amplification stage where the value generated gets spread far and wide, attracting new users or re-engaging existing ones. Think of it like a chain reaction of awesomeness – one happy customer tells two friends, who tell two friends, and so on, until your Growth Loop is exploding like a supernova! 💥

Below is an example of one of the most prominent and fast growing banks in Latam - Nubank:

.The Who: Players…

Who are the key players driving those actions? Think of these as the independent variables in our experiment—the forces that are influencing the outcome. Are they:

• Users: The stars of the show—the people who use and love (or hopefully will love) your product or service.

• Suppliers: Those behind-the-scenes heroes who provide goods or services that contribute to your loop (think freelancers, agencies, or vendors).

• Partners: The strategic allies who team up with you to expand your reach or enhance the value of your loop.

• Company: Yep, that's you! Sometimes, you're the one driving specific actions in the loop (like creating awesome content or running targeted ads).

Continuing with our Nubank example, below is an example of their referral and interest program adapted to the who:

.The Why: Motivation…

This is the most important variable of all—the driving force behind user behavior. It's the heart of your experiment. Why are those "whos" taking those "whats"? What's their underlying motivation?

• Are they seeking solutions to their problems?

• Are they chasing those sweet, sweet rewards?

• Are they craving recognition and social status?

• Or are they yearning for a sense of belonging and community?

Cracking the "Why" Code: The Nerd Marketer's Guide to User Motivation

Let's talk about what really motivates people to take action. If you don't have a clear reason, your efforts to grow will just be random and pointless. It's like baking a cake without sugar—it might look like a cake, but it won't taste good.

So, how do we tap into those powerful user motivations? I've got you covered! Here are the main categories of "why" that drive those actions:

1. Personal Gain

This is all about what users get out of participating in the loop for their own benefit.

• Entertainment: Are they having fun, getting a good laugh, or escaping boredom? Think Netflix—people binge-watch shows because it's entertaining!

• Communication: Can they connect with others more effectively or for a new purpose? Take Slack—it streamlines team communication and makes work more efficient.

• Information: Are they learning, gaining valuable insights, or satisfying their curiosity? Think of educational platforms like Coursera or Khan Academy—people crave knowledge!

• Flexibility: Does your loop give them more options, freedom, or control over something they value? Think Airbnb—it offers travelers more flexibility than traditional hotels.

• Time: Does your loop help users save time or get something done faster? HubSpot's marketing automation tools are a great example—they streamline tasks and free up precious time for marketers, giving them more time to focus on strategic initiatives.

2. Financial Incentive

Money talks, right? This motivation is all about those financial benefits.

• More Transactions: Does participating in the loop help users earn more money from their existing audience or customer base? Think of payment platforms like Stripe that make it easier for businesses to process transactions and increase revenue.

• Save Money: Does your loop help users save money or get a better deal? Consider discount programs or cashback rewards.

• New Customers: Does the loop connect users to new customer segments or markets they couldn't access before? Think of online marketplaces like Etsy—they give sellers a platform to reach a global audience.

• Loss Prevention: Does your loop help users protect their existing financial assets or avoid losses? Think insurance companies or financial security tools.

3. Social Connection

Humans are social creatures! This "why" is all about the power of belonging and connection.

• Recognition: Do users gain recognition, respect, or enhanced reputation by participating in the loop? Think of online communities like Stack Overflow, where users gain status by answering questions and helping others.

• Connection: Does your loop foster a sense of community or allow users to connect with like-minded individuals? Think Facebook Groups, online forums, or even multiplayer online games.

• Competition: Does your loop tap into a competitive spirit? Think fitness trackers that allow you to compare your stats with friends or leaderboards in online games.

• Confidence: Does participating in the loop boost users' confidence or sense of self-worth? Think educational platforms that help people gain new skills or online communities that provide support and encouragement.

Why "Why" Matters (More Than Your Morning Coffee)

Understanding the “why” isn't just about satisfying our inner marketing nerd (though that's always a bonus!). It gives us the power to:

• Identify Winning Loop Formulas: We can analyze existing growth loops and figure out which types might work best for our product or service.

• Create Killer Loops from Scratch: We can build brand-new loops by strategically combining the right ingredients, like a master chef crafting a culinary masterpiece!

• Improve Our Existing Loops: We can identify areas for optimization within our current loops and tweak those ingredients to make them even more effective.

.Final Thoughts…

By understanding the "who," "what," and especially the "why" behind each step in your Growth Loop, you gain the power to control those variables, optimize your experiments, and engineer growth that's as predictable as a well-executed scientific formula.

.Other newsletters that I am reading…

• B2B Growth: Every Friday, they study a successful content creator... then share what we learn with B2B content marketers.

• simple.ai: Join 100,000+ others and learn how to use Agent AI to grow your career or business.

• Growth Archive: Get real-world marketing examples every week from successful B2B projects that you can replicate for your own business

That is all for today friends.

Keep measuring, keep optimizing, and keep growing!

Jojo