09.3.4 · Skill in Viral growth
Network effects
When the product becomes more valuable as more people use it.
Network effects make a product better with each new user, as in marketplaces, messaging and collaboration tools. They create strong competitive advantage. They also make the start hard, since the first users get the least value.
Resources
2- articleGo deeperThe network effects bible ↗NFX · 2019 · 30 min
The different kinds of network effects and how strong each one is, from investors who study them.
- bookGo deeperThe cold start problem (chapter preview) ↗Andrew Chen · 25 min
How networked products get their first users when the product is worth little until others join.
Tools
none yetTools for this topic are being researched.