Growth loops: the mechanics of compounding B2B revenue

The funnel is a useful diagnostic and a terrible strategy. Funnels describe what happens to a cohort once. Loops describe what happens when the output of one cycle becomes the input of the next.

Every great compounding business has at least one growth loop. Stripe's loop is developers shipping payments, which makes payments more available, which attracts more developers. Notion's loop is users inviting collaborators who become users. Salesforce's loop is partners building apps that make Salesforce more valuable.

B2B loops live in four categories. Content loops, where users create content that attracts users. Sales loops, where customers refer or expand. Product loops, where usage drives invitations. Data loops, where scale improves accuracy which attracts scale.

Pick one loop and engineer it deliberately. Most B2B companies have a dormant loop that needs three pieces of work to switch on: a trigger, a reward, and a friction reduction. Identify which is missing and you've found your quarter's roadmap.

Triggers are usually email or in-product nudges at a moment of value. The wrong trigger is 'please refer us.' The right trigger is 'you just unlocked your fifth integration — share the dashboard with your team.'

Rewards must be intrinsic for the loop to compound. Cash incentives don't sustain B2B loops. Status, capability, and access do. The best rewards make the user look smart or save them work.

Friction reduction is the unglamorous one. Reduce the number of clicks, the number of fields, the number of decisions between intent and action. Every removed step roughly doubles loop velocity.

Measure loop k-factor: how many new users does each new user generate? Above 1.0 and you have a compounding business. Below 1.0 and you have a leaky funnel disguised as a loop.