What is the viral coefficient (K-factor)? Formula and a worked example

What is the viral coefficient?

The viral coefficient (K-factor) answers: how many new users does each user bring in?

K = invites sent per user × invite conversion rate

If K is above 1, each generation of users is bigger than the last and growth compounds without other channels. In practice K is almost always below 1, and that is still worth a lot.

A worked example

Sample data: 100 new users each send 3 invites on average, and 15% of invites become users.

K = 3 × 0.15 = 0.45

The total is 100 ÷ (1 − 0.45) ≈ 182. Every user you acquire through ads or content turns into about 1.8 users. Raising K from 0.45 to 0.6 makes that 2.5, which lowers the effective acquisition cost of every channel.

Cycle time

Viral cycle time is how long it takes from a user joining to their invitees joining. At the same K, a cycle of 2 days compounds much faster than one of 30 days. Shorten it by asking for invites at the moment of value (a shared report, a finished project) rather than at sign-up.

Measuring it with events

1. Send an event when an invite or share happens (invite_sent, with the channel).
2. Put a referral code or inviter ID on the invite link, and send invite_accepted (or tag sign_up with the inviter) when it converts.
3. Calculate the two factors separately each week: invites per active user, and accepted ÷ sent.
4. Break them down by where in the product the invite was sent; that shows where to add sharing.

Related: AARRR (referral is the last R) and growth loops.