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The Curse of the Network Effect | Nir and Far

Stashed in: Network Effects, @nireyal

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That is one ugly picture Nir chose for this article. Yuck.

Also, although his premise is that everything depends on context, I gotta say...

It's better to have network effects than not.

And network effects are still very hard to get.

yeah, I don't see the connection from the ugly pic with the topic, though I wanted to pick something unique to this specific post :/

Agreed that network effects is super difficult and one should be so lucky to have that. I thought it's a good reminder that just having network effects alone isn't enough to build a real business around. 

edit: Maybe there's something to be said about the scale / size / magnitude of network effects too. Twitter has enough frequency and quantity of events in their network effects that they can sell ads against. Maybe the example of that events site just didn't have the same kind of volume of "interaction" (however defined), so it couldn't monetize like say Twitter. So perhaps there's also something to be said about the magnitude of the network effects.

You're definitely right that size matters.

And it's a lot of the reason Twitter waited so long to monetize.

They launched in 2006 but didn't really ramp their monetization efforts till 2011.

By then they had enough network effects to launch an ad network.

Re: Pic - He's "Cursing" (and it also gets attention :)

BTW Adam, my point isn't that network effects aren't great, they very much are! I'm saying that without the power to charge for the value created, some marketplaces have trouble monetizing.

Thanks for reading!

Nir, thank you for the clarification. I get it now!

So think through monetization BEFORE completely building product. That's a good lesson.

As for network effects themselves, I agree: They are like lightning in a bottle. Great but so hard to catch!

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