3.1 Reforge - Single Loop Quant Model Introduction

Building a Single Loop Quant Model

• A single loop quant model helps answer the question of how a product grows.
• It aids in prioritization, strategic bets, and investments.
• Qualitative models inform single loop quant models, which in turn inform end-to-end quantitative models.

Strengths and Weaknesses

• Strength: Validates and prioritizes ideas around a single loop.
• Weakness: Doesn't show how multiple loops interact or influence each other.

Steps to Build a Single Loop Quant Model

1. Map out steps and output metrics.
2. Define conversion formulas.
3. Understand conversion variables within the formulas.

Examples

• Quora's core content loop.
• New Relic's sales loop.

Process

1. Write out the steps of the loop.
2. Define the output metric for each step.
3. Define conversion formulas between steps.
4. Insert baselines for each conversion variable.
5. Assemble and evaluate the quantitative model in Excel.