AARRR vs growth loops
A funnel is a line and a loop is a circle, and the difference is not cosmetic: a funnel treats new users as something you buy, a loop treats them as something the product produces. But you do not choose between them. A growth loop runs through the same five stages AARRR already names — it just draws the edge that AARRR leaves out, the one where Referral feeds Acquisition.
At a glance
Shape
Linear: input at the top, customers at the bottom
Circular: the output becomes the next input
What it is good at
Diagnosis — where do people drop out?
Strategy — what compounds?
What it hides
That the last stage feeds the first one
That every step in the circle has a conversion rate
The number it produces
A rate per stage, and a drop-off between each
A coefficient: how many new users each user brings
A loop is a funnel with the last edge drawn in
AARRR already contains the feedback. Referral is the stage where existing users produce new ones, and new users are Acquisition's input — so the circle is there, drawn as a straight line with the ends not joined up. Drawing it straight is the whole complaint, and it is a fair one: a picture that ends at the bottom of the page invites you to think the only way to refill the top is to pay for it.
Which is why the two are not rivals. Reforge popularised loops precisely against funnel-shaped thinking, not against funnel-shaped measurement — and the loops people draw are always made of steps that any funnel would recognise. The useful move is not to abandon one for the other; it is to keep measuring the stages and start asking which of them produces its own input.
What each one gets wrong alone
Loop-thinking without funnel measurement names loops that do not close. "Users invite users" is a loop on a whiteboard and a coefficient of five hundredths in the data, which is a discount on paid acquisition rather than a growth engine. The whiteboard version is never wrong about the shape — it is wrong about the size, and only the stage rates can tell you which.
Funnel-thinking without loops leaves you with a business where every new customer costs roughly what the last one cost, forever. That is a perfectly viable company. It is also a company whose growth is a line in the budget rather than a property of the product, which is a different thing to own and a much more expensive one to scale.
How to tell whether your loop closes
A loop is only worth naming once each of its steps has a number: what share of users take the sharing action, how many people see each share, and what share of those come back through the door. Multiply the three. Above one, the loop grows on its own. Below one — which is where nearly every real loop sits — it dampens, and its honest description is that it lowers your effective acquisition cost rather than replacing it.
This site is its own worked example, and it is deliberately small. A result page is shared, the link preview carries a score, someone opens it, and the page offers that reader their own Tour — with the sharer credited on the link. Three steps, three measurable rates, one coefficient at the end. Remove any one of the three and the circle becomes a funnel again, which is the most useful thing loop-thinking teaches.
Which to use, and when
Measure with the funnel, plan with the loop. Draw the loop you think you have, then go and find the three rates that make it up — if you cannot produce them, what you have is an intention rather than a loop, and the funnel is still the honest picture of your growth.
The terms behind this
The other comparisons
Whichever framework you settle on, the first question is the same one: which of the five stages is holding the others back? Fifteen questions, three minutes, no signup.