I’ve looked at it, but did not include it in the post simply because most companies worry mostly about how to get growth going, as opposed to what happens when it slows.

The solution is a logistic function as the kind found in population growth (as I’m guessing you know). Basically, starts exponential and then flattens out as the target market is converted to customers.

The most relevant part for SaaS would be the value that it flattens out to,
which is Target Market Size x ( 1 – a / g ). Without churn, viral growth would
eventually consume the entire market. But, just as in the case where growth is flat
churn places a limit on growth.

This is the most intuitive point to remember: churn chases the acquisition rate until it kills it (Rule #1). Acquisition growth must outpace churn for the company to keep growing (Rule #2), and since churn is exponential decay, the only way to really outpace it permanently is exponential growth (Rule #3)…otherwise churn will catch it. And, when the total churn churn rate x # customers = acquisition rate….growth stops. For the limited population scenario, growth slows below the exponential threshold as there are fewer and fewer customers to convert. And, stops when the churn rate equals the acquisition rate at the “churn limit” above.

This is great by the way. I really like your model, but I was wondering if you’d thought perhaps of incorporating the capacity of the viral universe? i.e the assumption been that. total number of customers can only grow up to a certain point, which probably means that the growth rate (g) or the baseline growth (b) will have to be adjusted for time.