Wondering if there's a simple formula for exponential growth? Here's a brief explanation as described by Bayram Annakov, CEO of App in the Air, in his article.
The formula is:
k > (1-retention), where k is the fraction of new users attracted by existing users.
The system incorporates 2 feedback loops:
1. Reinforcing loop: more active users >> more new users >> more active users.
(New Users = Active Users * k)
2. Balancing loop: more active users >> higher churn rate
(Churned Users = Active users * (1-retention), since churn rate is reverse of retention)
In summary, to achieve exponential growth, you need: k > churn rate, as illustrated below:
(Please refer to the original article for more details)