Note: This model goes with the virality study article, see links at right for paper and spreadsheet model.
Finding ways to acquire customers at a low cost is a key goal for businesses everywhere. One of the best ways to get that is through the viral spread of your products. This article addresses that question from the numbers side, What are the factors that go into viral spread and what can we learn from modeling virality?
The basic viral curve looks like this (note, many people are only used to seeing the ‘hockey stick’ part of this curve however, as growth continues over time, you reach saturation and your ‘hockey stick’ turns into the S-curve shown at right).
Product Virality borrows ideas from epidemiology which studies the spread of diseases in populations. A commonly used model in epidemiology is the Compartment model which models populations as they move from one stage (or compartment) to the next. The model I’m using below is a SEIS model, which has three compartments: Susceptible, Exposed and Infected which for products corresponds to Potential users, Invitees and Users.
The equations that describe the flow between these boxes from Potential Users to Invitees and then to Users. They look like this:
These equations are captured in the spreadsheet below. The model includes factors for Total Addressable Market and Cycle Time and it allows you to continuously update your inputs (% who invite, response rate, etc) for each period. You can find a link to download the spreadsheet at right.