If I were to walk up to you and say "I started with 1 customer and after 4 iterations, I ended up with 81." You might say "I don't get it. It doesn't make any sense to me. How am I supposed to understand how you got there?" Okay, that response is completely reasonable. So instead, let's say I start with 1 person. And that one person brings in 10 people. Do you understand that? - yes. And then of those 10 people, 3 people come back to use my product. So now I have 1 person that led to 3. Do you understand that? - yes. And then of those 3 people, each of them brings in 10 new people AGAIN. Do you understand that? - yes. And so that gets me 30 (3 x 10) new people. Does that make sense? -yes. And then from those 30 people, 3 out of every 10 will return. That means 9 (3 x 3) people will return. Does that make sense? - yes. After building from the previous run, that's how I went from 1 to 9. Now those 9 returning patrons will each bring in 10 new people. 9 x 10 = 90 new people. Does that make sense? - yes. Again, of those 90 people, 3 out of every 10 will come back to use my product. So 3 x 9 = 27 people. Does that make sense? - yes. Again, building from the previous run, that's how I went from 1 to 27. You probably get the pattern now, and so for the final iteration, those 27 people bring in 10 new people each gets me the formula of 27 x 10, which = 270. Does that make sense? - yes. And finally 3 out of every 10 (3/10 = 30%) of the 270 gets me 81 (3 x 27 = 81, or in other words 30% of 270 = 81) returning customers. I hate to sound like an ass, but this is maybe 2nd grade math. And so now when I say "I started with 1 customer and after 4 iterations, I ended up with 81." Does that make sense?" :) p.s. for those of you who just want the numbers and don't care for all the unnecessary words: 1 x 10 = 10 if 30% return, then = 3. 3 x 10 = 30 if 30% return, then = 9. 9 x 10 = 90 if 30% return, then = 27. 27 x 10 = 270 if 30% return, then = 81. Therefore I started with 1, and after 4 iterations, I ended up with 81.
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## AuthorMy name is Dae Yu. ## Archives
December 2017
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