The final force I’ll discuss is the Economic network effect, which is how a business model—including profitability and unit economics—improves over time as a network grows. This is sometimes driven by what are called data network effects—the ability to better understand the value and costs of a customer as a network gets larger.

The mechanics of network effects provide a path for new products to break through, as they are often able to attract new users by word of mouth and viral growth, as well as increase engagement and decrease churn as the breadth and density of the network grows.

“The Acquisition Effect,” on the other hand, is the network effect that powers the acquisition of new customers into your product—in other words, viral growth. Products are inherently viral when people bring their friends and colleagues into a network simply by using it—as Dropbox, messaging apps, and social networks do.