How Spotify returned to profitability in 2023

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• Benefits for referred users: a 2-month trial instead of the normal 1-month trial

• Points 1 and 2 target the less-likely customers and drive incremental subscribers. Think your less tech-savvy family member who wouldn’t have paid for a subscription themselves, but who’s happy to be shown the ropes by their millennial/gen-Z family member.

• The K-factor it is the number of new users that a single user attracts to a product.

• If your K-Factor is <1 then your viral coefficient is relatively low. That means each user only leads to less than one other user and your growth via this channel won’t make a significant dent. As soon as your K-factor is >1, that’s where you start to see compound growth. There’s a few levers that impact this: % of users that share Frequency of sharing (i.e. shares per user) Conversion from viewed share link to sign up (invite acceptance rate)

• track each step to work out where users are dropping off

• The key thing is to

• and focus your efforts.