added by Jay Matthews · updated 2y ago
All about Network Effects
- Network effects are about adding value and defensibility to your product. A network effect is when every customer of your product adds incremental value to all the other customers of your product so that it becomes difficult for customers to find any alternative product which gives them as much value.
from Viral Effects Are Not Network Effects by James Currier
Sixian added
- Network effects are defined as when the value of a company’s product or service increases as usage increases.That means the more users you have, the happier they are, and the cheaper it is to acquire new ones, which means your growth accelerates. Accelerating growth means exponential growth. You want to invest in and work at businesses that grow ex... See more
from Platforms and Aggregators by Uncharted Territories
Darren LI added
- However, it’s also true that a lot of network-based utility only is realized at some level of scale. (As per NFX: “The simplified definition of network effects is that they occur when a company’s product or service becomes more valuable as usage increases.)
from Status Games: Engineering Scarcity in a World of Abundance by Eugene Wei
sari added