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Viral Effects Are Not Network Effects
Network design comparison: Airbnb vs Crypto-Crypto networks experience a value plateau as new participants have less and less upside-Airbnb users and hosts gain more value when the network grows, regardless of when you joined
Aaron Levie • The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch: 20VC: Box's Aaron Levie on Why Founders Cannot Hedge Their Bets, The 2 Categories of Wrong Decision and How To Avoid Them & The Biggest Dangers of Being Over-Funded as a Startup
The “effect” part of the network effect describes how value increases as more people start using the product. Sometimes the increasing value manifests as higher engagement, or faster growth.
Andrew Chen • The Cold Start Problem: Using Network Effects to Scale Your Product
In a recent interview on the Acquired podcast, Ben Thompson (author of Stratechery) shared this same finding from his personal experience:
“ The problem with a word-of-mouth business and exponential growth is people run out of people to talk to. That’s the limiting factor. There’s a little bit of exponential with every new... See more
Lenny Rachitsky • Virality is a myth (mostly)
First, does the product have a network? Does it connect people with each other, whether for commerce, collaboration, communication, or something else at the core of the experience? And second, does the ability to attract new users, or to become stickier, or to monetize, become even stronger as its network grows larger? Does
Andrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
How do you build network effects in your product? How do you know when network effects are kicking in, and if they are strong enough to create defensibility? How do you pick the right metrics to optimize to achieve viral growth, reengagement, defensibility, and other desired effects? What product features do you build to amplify network effects?