network effect

The Dynamics of Network Effects | Andreessen Horowitz Dynamics of Network Effects (a16z, D’Arcy Coolican and Li Jin) - FoundX Review - Entrepreneurial and Know-how information for startups

• He noted that knowledge of network effects is a prerequisite, but that it is becoming more fluid

• The core theory behind the network effect is that the larger a platform or product that has a network effect, the more effective it is. Not only does it increase value to the user, but it also allows them to acquire more resources to improve their product, thus strengthening the “flywheel.

• However, it appears that reality has recently begun to deviate from this theory. Interesting consideration.

• The concept of “network effects” is well known, and as a result, more and more people implicitly assume that the effect “exists.”
  • But of course that’s not true, and only some systems have this property.
  • Whether the system we are talking about now has a network effect is another story.

Especially this one.

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• Where social networking sites actually cease to be of value as network formation systems and become social media-ized.
  • Some people use it as a reader and others use it as a megaphone.

relevance - positive externalities - externalities

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