Viral Coefficient
Definition
Viral coefficient measures how many new users each existing user brings in. A coefficient above 1.0 means exponential growth without paid acquisition—each user recruits more than one other user.
What is Viral Coefficient? How to Calculate & Grow | early.tools
Formula: Viral Coefficient = (Invites Sent Per User × Invite Conversion Rate)
Example: Each user invites 5 friends on average. 20% of invites convert to signups. Viral coefficient = 5 × 0.20 = 1.0. Each user brings exactly one more user.
Why it matters: Viral coefficient above 1.0 = exponential growth. Start with 100 users, each brings 1.2 users = 120 new users. Those 120 bring 144. Then 172. Growth compounds without spending on ads. This is how Facebook, Dropbox, and Slack scaled so fast.
Coefficient below 1.0: Most products have viral coefficient under 1.0. That's okay—you still benefit from word-of-mouth. 0.5 means every 2 users bring 1 more user organically. Combined with paid acquisition, this reduces CAC significantly.
Viral loop mechanics: (1) User experiences value, (2) User invites others (email, share link, referral), (3) Invitee signs up and experiences value, (4) Invitee invites more users. Optimize each step: make sharing easy, make value immediate, reward referrers.
Viral time (k-factor): How long it takes for one user to generate the next user. Faster loops = faster growth. Dropbox's referral program: immediate storage reward for both parties = short viral time. Clubhouse invite-only: artificial scarcity increased perceived value, faster viral spread.
Two types of virality: (1) Inherent virality—product only works with others (Slack, Zoom, Google Docs). (2) Incentivized virality—users share because you reward them (Dropbox storage, Uber ride credits). Inherent virality is stronger and more sustainable.
Optimizing viral coefficient: (1) Make sharing core to product experience, not an afterthought, (2) Reduce friction—one-click share, pre-filled invites, (3) Give both parties value—referrer and referred both benefit, (4) Measure and iterate—track invite sends, conversion rates, time-to-next-invite.
Examples
Dropbox gave 500MB extra storage for every friend invited (up to 16GB free). Viral coefficient was ~1.8—explosive growth, minimal ad spend. Hotmail added 'PS: I love you. Get your free email at Hotmail' to every email footer—reached 12M users in 18 months with almost no marketing budget.
Related Terms
CAC (Customer Acquisition Cost)
CAC is how much it costs to acquire one paying customer. Calculate it by dividing total sales and marketing spend by the number of new customers acquired in that period.
PLG (Product-Led Growth)
PLG is a go-to-market strategy where the product itself is the primary driver of customer acquisition, conversion, and expansion—not sales or marketing teams.