K > 1 is a runaway train, hold on. It happens rarely and apparently when it does, it's the ride of one's life.Im not entirely sure this is that rare. Lets think of it like this: whatever gives you new customers is part of what I call currently your "ad surface" or "marketing surface". If a customer brings you another customer, it's just because that guy is marketing too - obviously. So everything that gives you customers is marketing. But of course, thousands and thousands of customers are so big of a surface that they dwarf any given techcrunch articles (most likely). My point is coming.
Now let's say one of your customer write about your product in his blog. Maybe that gonna brings you, say, 25 customers. Another make a youtube video that makes 500K views. Better than that, techcrunch hears about your product and write about it spontaneously. As we can see, those are indirect marketing surfaces and they can get very big.
Now, let's talk video games, about some niche type of games, for example, roguelikes. Roguelikes arent played by many people and yet some of them are well known from roguelikes players. Ex: DoomRL. And this is my point, it seems not plausible to me that DoomRL got his users and his niche-fame from N = 1 at some point in time and not by direct customer-to-customer referrals.
The way I'm seeing it now is that, most of the time you are in N = 1. And it happens more than one think - it's counter-intuitive in some ways. Also, at some point, your product is famous, and then customer-to-customer referrals (of type b. see edit of original post) can get big.
Which means, strategically, you need to get day-to-day-N as big as possible obviously, and you need faith: you gonna hit those special customers occasionally that gonna critically change N upward. That's my current understanding. It's getting better I think :)