Start Up Blog

Websites & The Network Effect

Posted in entrepreneurship by Steve Sammartino on April 18, 2011

I took this piece of copy directly from the 37 Signals blog. When it comes to websites, it’s what often the one thing we really need to break through. I also think it is why ‘free’ on the web just wont go away. It’s something web startups just can’t ignore.

The Network Effect: The network effect occurs when the value of a particular good or service increases for both new and existing users as more people use that good or service. It can also occur when other firms design products that compliment an existing product, thereby enhancing that product’s value. For example, the fact that there are literally millions of people using eBay is the thing that both makes eBay’s service incredibly valuable and makes it all but impossible for another company to duplicate its service.

twitter-follow-me13

2 Responses

Subscribe to comments with RSS.

  1. [...] Social networks are social phenomena, after all, and much of the best work on their dynamics has been done by anthropologists and sociologists, not technologists or marketers. As social entities, networks are understood as clusters of shared relationships and interactions between individuals. These interactions can be brief or persistent, light-hearted or serious, and so on. Our social interactions are not lined up like dominoes – I know you, and you know Jim, and he knows Kim, and she knows Tim – but tend to be mutual and interconnected. Whenever several of your friends forward you the same email, you’ve been hit by a network effect. [...]

  2. The future of social networks #2 said, on October 10, 2012 at 7:42 am

    [...] Social networks are social phenomena, after all, and much of the best work on their dynamics has been done by anthropologists and sociologists, not technologists or marketers. As social entities, networks are understood as clusters of shared relationships and interactions between individuals. These interactions can be brief or persistent, light-hearted or serious, and so on. Our social interactions are not lined up like dominoes – I know you, and you know Jim, and he knows Kim, and she knows Tim – but tend to be mutual and interconnected. Whenever several of your friends forward you the same email, you’ve been hit by a network effect. [...]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 899 other followers

%d bloggers like this: