What is the K-factor and viral coefficient?

Full Explanation

K-factor is calculated as (invites sent per user) × (conversion rate of invites). A K of 1.5 means each user brings 1.5 new users; a K of 2.0 means each user brings 2 new users. With a K > 1.0, the user base grows exponentially; with K < 1.0, the company must rely on paid acquisition to grow. Products like Slack (K~2.5) and Figma (K~2.0) achieve viral adoption through product mechanics that naturally encourage sharing. Most SaaS products have K between 0.5 and 1.3. Products with K < 0.5 require sales-driven growth and are unlikely to achieve viral adoption without significant marketing spend. The viral cycle is measured in days — Slack's cycle is ~15 days, meaning the user base doubles every 2-3 weeks in high-adoption cohorts. For fundraising, demonstrating a K above 0.8 is significant because it signals your growth has an engine beyond paid acquisition. Opagio's calculator includes viral coefficient projections based on your network effects. The transition from founder-led sales to scalable growth requires a shift in which metrics matter most. Early-stage companies focus on product-market fit indicators: activation rate, engagement frequency, and qualitative feedback. Growth-stage companies shift attention to efficiency metrics: customer acquisition cost relative to lifetime value, payback period, and gross margin. Late-stage companies preparing for exit must demonstrate both efficiency and predictability through metrics like net revenue retention, gross revenue retention, and logo churn. Each stage demands different measurement frameworks, and the intangible assets being built at each stage differ accordingly.

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