📝 usncan Note: Your Startup Isn’t Stuck, It’s Just Between Loops
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Feeling stuck as a startup? You might just be between loops. Learn how product, growth, and … More
Startups often feel stuck not because they’re broken, but because they’re between systems. Тhe operation of most startups could be analyzed with the help of the loops concept – product, growth, and monetization cycles that reinforce progress. When one loop slows or hasn’t been built yet, it feels like traction disappears. But that’s not necessarily stagnation, it’s a signal to build or bridge the next loop.
This framing helps founders make sense of slow patches and see them not as failures, but transitions.
1. What Are Startup Loops?
A startup loop is a repeatable cycle that produces compounding returns. A product loop creates more value the more it’s used (e.g. user-generated content, engagement feedback). A growth loop turns usage into more users (e.g. sharing, referrals, SEO). A monetization loop converts user value into revenue, which funds better products.
These concepts have been covered extensively by experts like Brian Balfour, who defines growth loops as more sustainable than funnels, since they compound over time.
When a startup is operating inside one of these loops, things feel fast, fluid, and natural. When you’re between loops – say, between validating usage and figuring out how to grow, things feel uncertain.
2. The Illusion Of Stuck
Early-stage teams often mistake “between loops” for failure. For example, a startup may have early product engagement, but no clear growth model. Or growth might be happening, but monetization is lagging. These moments feel like you’re spinning your wheels, but they’re often the time to focus on loop transitions, rather than a full-on not pivot.
Stripe, for instance, didn’t monetize heavily for years. They focused first on building an airtight product loop with developers. Only later did the monetization loop kick in, once trust and integrations were strong.
3. Building The First Loop: Product
The first real test of any startup is whether users come back. Product loops are formed when every user interaction improves the product experience for themselves or others. This could mean content (Notion), data (Figma), or network value (Slack).
If this loop doesn’t form, nothing else matters. But once it does, teams can start building the next cycle: turning usage into growth.
We break down this process more fully in our “27 Steps For Building a Startup” guide, which goes through all startup stages, especially in the early validation and traction phases.
4. Transitioning Into Growth Loops
Growth loops transform engaged users into new users. Dropbox’s referral model is a classic example. The more people invited friends, the more storage they got, and the more users Dropbox gained. Notion used templates and community content to fuel organic discovery.
The key difference between loops and campaigns is sustainability. Loops don’t rely on continual reinvestment; they feed themselves. But reaching this stage often takes deliberate product work – making sharing easy, reducing onboarding friction, and tracking what kinds of usage correlate with invites or visibility.
5. Bridging To Monetization Loops
Many startups have users and even growth but struggle to monetize. Monetization loops kick in when revenue enables better products, which bring in more users, which generate more revenue. This is different from one-time purchases or ad-hoc pricing.
Figma nailed this by offering free use for individuals and teams, then monetizing organizational controls and collaboration tools. Revenue from paying teams fed into better enterprise features, which attracted more organizations.
Bridging to this loop requires a mindset shift: from charging early to charging at the right point in the user journey, when value is proven and repeatable.
6. Diagnosing Where You Are
To figure out if you’re truly stuck or just between loops, ask these questions:
- Are users getting value and coming back? (Product loop)
- Are new users coming in without paid ads? (Growth loop)
- Is there a path from usage to revenue that’s repeatable? (Monetization loop)
If the answer to one is no, your job isn’t to panic, it’s to engineer the next loop. Many startups confuse “slow growth” with “broken model” when really, they’ve just hit a transition point.
7. Loops Are Built, Not Discovered
Most teams don’t stumble into loops, but rather build them deliberately. This involves tight feedback cycles, smart experiments, and a long view of value creation. Even viral products like Slack and Calendly had to work hard to engineer usage patterns and optimize the loop mechanics.
Don’t assume your product will grow or monetize just because it works. Growth loops and monetization loops are their own disciplines.
