Viral Effects Are Not Network Effects

To develop great virality you must be focused on language. Language is the rails on which products are shared, so you must play with language, experiment with it, and build the product around the language.

The thinking behind building network effects is less about emotion and more about the math for customers around getting value — utility. Giving the customer more value out of your product by getting your other customers to put value in it. Customers are not even usually aware that they are doing mental math around the value they are getting from ne... See more

Another unique thing about virality is that it comes and goes over time depending on the channels available. These viral channels are constantly in flux. Not true with network effects, which are more stable over time.

...we learned how much less important viral effects are to long-term value creation than defensibilies like network effects.While viral effects are a useful attribute of products to reduce the expense of acquiring new users, network effects remain the key driver of value creation for startups in the digital age by keeping people using them.

For products seeking network effects, having virality means that you can add new users faster to build your network effect and hit critical mass faster than your competitors. You don’t need virality to do this, as you can pay to acquire users, but virality helps you achieve network effects by growing the network more quickly. Sometimes explosively.... See more

Playbooks for creating viral products

1.  Novelty/Entertainment


2. Instrumented

Viral effects are about growth of new users. Viral effects are when you get your existing customers to get you more new customers, ideally for free.

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.

For products seeking virality, also having a network effects approach to the product is useful because it makes it easier to create viral language hooks using words like “share”, “get”, and “see” that aren’t as easy to build into non-network effects products.