Network Effects in SaaS : A Desired Moat (Part 1 of 3)
Chen talks about how Network effects aren’t one singular effect, but rather made up of three distinct forces:- The Acquisition Effect which allows products to tap into their network to drive growth in users more cheaply as the network grows- The Engagement Effect which involves user engagement going up as the network grows- The Economic Effect whic... See more
Tanay Jaipuria • Breaking Down Network Effects
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
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
The best examples from the last two decades are Google and Facebooks’s multi-sided network effects. People prefer searching and connecting with each other on these properties, so advertisers and content creators keep using them. It creates a virtuous cycle, and makes the self-interested move on every player’s part one that reinforces these companie... See more