Saved by Bryant Wu
Breaking Down Network Effects
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
Uncharted Territories • Platforms and Aggregators
important. A successful network effect requires both a product and its network,
Andrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
To make it concrete enough for product teams to act upon, I argue that there are a trio of network effects: Engagement, Acquisition, and Economics.
Andrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
“The Engagement Effect” is what happens when a product gets stickier, and more engaging, as more users join. This is the closest to the classic definition of the network effect, as defined by Theodore Vail of AT&T.
Andrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
The “effect” part of the network effect describes how value increases as more people start using the product.