exponenital growth of referred users

[excel_mutt]

Hi everyone,

I am building a financial model that relies on referrals from current users to drive traffic to the site. In other words, when we sign up a new client, over the course of the next 10 days they will refer 5 other people. Of those 5 people, a % sign up and over the course of the next 10 days, each refers another 5 people and so on.

1. It is a 5 year model
2. I need to be able to see the total number of users on any given day and measure the total users for each reporting period (monthly and yearly).
3. I have an assumption page, so the formulas would need to reference back to it. It is here that I will change the number of days (10 in the above example) and number of referrals per user (5 in the above example) and the percentage of conversion from the traffic to an actual user.

What I did so far was to create a 5 year log and start the multiplication process.... This was far off! what happens is without the time variable, I'm just multiplying the number of users times the number of referrals each day and it's growth is unrealistic.

So my question is; is it possible to measure this growth rate with variable inputs like time and referrals? If so, how?

Thanks

 

[Beezkneez]

This looks like a mighty big project for you. I can conceptually see how you could get it working, depending on your assumptions.
Assume that everyone sends out their referral invites on day 5. If you try and project that a % will send them on day 1, another % on day 2 etc - my brain explodes.

Set a For Next loop to iterate through the number of days you want to cover. Setting a start date as a parameter also wouldnt hurt.

During the loop, store 7 variables.
varBrandNewUser
varNewUserday1
varNewUserday2
varNewUserday3
varNewUserday4
varnewUserday5
varOldUsers

Each loop (representing one day), however many users are parked in varnewUserday5 have the take up % applied to them (rounded) and that number becomes BrandNewUser.

Sum all the variables for the total # of users on that day and output it along with the date being the Startdate + loop variable.

Add varnewUserday5 to varOldUsers. These guys no longer give referrals.
Add varNewUserday4 to varNewUserday5,
Add varnewUserday3 to varnewUserday4.... etc
Add varBrandNewUser to VarNewUserDay1

Next Loop

Hope that gets you started.