
Saved by Jay Matthews
All about Network Effects
Saved by Jay Matthews
This is where the classical definition of a “network effect” is wrong. I redefine it so that it’s not one singular effect, but rather, three distinct, underlying forces: the Acquisition Effect, which lets products tap into the network to drive low-cost, highly efficient user acquisition via viral growth; the Engagement Effect, which increases inter
... See moreThe “effect” part of the network effect describes how value increases as more people start using the product.
“The Economic Effect.” Network effects can help improve business models over time, in the form of improved feed algorithms, increased conversion rates, premium pricing, and more.
The network effect: If you offer a service or a product that works better when my friends use it, I’m likely to tell my friends. This isn’t an afterthought or a marketing gimmick— it’s at the heart of product design and user experience.