Two very different kinds of virus.

Joel Peel

These days, everyone wants to go viral.

It doesn’t matter if it’s a video, a meme, a product, or the proper way to massage an opossum — after creating something, many people’s next logical step is to seek the ever-elusive goal of “virality.” ☢

But here’s the thing: not all forms of virality are created equal.

When most people talk about “virality,” they mean when something — a piece of content, a product, an ad campaign — takes off like wildfire and gets millions of shares on the internet. 🔥🔥🔥

If you can get this, it’s awesome. It can make careers and catapult companies into the stratosphere. But it’s also inherently difficult to control.

There are things you can do to achieve virality (and plenty of agencies ready to promise it to you), but ultimately, it’s still a guessing game based on the fickle winds of the online sharing economy.

But there’s another form of virality called the viral coefficient, and in many cases, this is both easier to control and more useful to a business.

The Math Behind the Madness

The chief difference here is that something “going viral” is essentially a one-off event, and often a freak one at that. Viral coefficient, on the other hand, is a metric that can be measured and influenced to benefit your business.

Viral coefficient measures the number of new users your product brings in per each new user that signs up. It’s essentially a metric representation of successful referral rate: if a new user signs up for or buys your product, how many additional new users will they bring in?

To calculate it, you need to know the average number of invitations a given user sends out once they sign up for the product, as well as the average rate of acceptance for those invitations. Mathematically, it looks like this:

(# invitations / # new users) * (# new referral signups / # invitations) = VC

For accuracy’s sake, you’ll probably need to measure this over a period of time so you can get an average.

As an example, let’s say that in a given month, the product garnered 136 new users, who sent out 478 invitations in total. Out of those invitations, we got 256 new users. In that case, our calculation is:

(478/136)*(256/478) = 1.88

Essentially, this tells us that for every new user that signs up, we’ll get close to 2 additional new users. Not explosive growth, necessarily, but not awful.

Why This Matters

This number is important because it’s a direct, major influence on how quickly you can expect your customer or user base to grow. A high viral coefficient virtually guarantees hockey stick growth. And, even more critically, it’s something you can actually do something about.

Unlike the traditional conception of “virality,” viral coefficient is something you can influence through changes to the invite and signup process (conversion optimization), referral programs like those instituted by Groupon, or even changes to the structure of the product itself.

If lightning strikes and you “go viral,” you’ll get a blast of growth that can make a difference for business. But if your viral coefficient is high, you can count on the kind of sustained, exponential growth that really generates long-term profits.

And no matter what you’re making, that’s a good thing to have.


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Author

CEO and Co-founder of Neon Roots

Ben Lee is the co-founder and CEO of Neon Roots, a digital development agency with a mission to destroy the development model and rebuild it from the ground up. After a brief correspondence with Fidel Castro at age nine, Ben decided to start doing things his own way, going from busboy to club manager at a world-class nightclub before he turned 18. Since then, Ben has founded or taken a leading role in 5 businesses in everything from software development to food and entertainment.