How to calculate the K-factor?

K-factor is a metric of a product's viral growth, indicating how many new users are attracted by one existing user.

The formula for calculating the K-factor:

K-factor = (Number of invitations sent by one user) × (Conversion rate of invitations to new users)

Where:

• Number of invitations — the average number of invitations sent by one user.
• Conversion rate — the proportion of invited users who actually registered or became active users.

For example, if on average one user sends 5 invitations, and 20% of the invited users become new users, then:

K-factor = 5 × 0.2 = 1.0

K-factor values:

• If K > 1, the product grows exponentially (viral growth).
• If K = 1, growth is linear.
• If K < 1, growth slows down.

To calculate the K-factor, data on invitations and conversions need to be collected, then the formula is applied.