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Network Effects
The Power of the Platform
The Power of the Platform
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Price effects and brand effects have their place in a startup’s growth strategy. But only network effects create the virtuous cycle we described above, which leads to the building of a longlasting network of users—a phenomenon we called lock-in.
Price effects and brand effects have their place in a startup’s growth strategy. But only network effects create the virtuous cycle we described above, which leads to the building of a longlasting network of users—a phenomenon we called lock-in.
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In some cases, the growth of a platform can be facilitated by an effect we call side switching. This occurs when users of one side of the platform join the opposite side—for example, when those who consume goods or services begin to produce goods and services for others to consume. On some platforms, users engage in side switching easily and repeatedly.
Uber, for example, recruits new drivers from among its rider pool, just as Airbnb recruits new hosts from among its guest pool. A scalable business model, frictionless entry, and side switching all serve to lubricate network effects.
interesting that they say people do it easily. i would love to see stats on how often people who drive for uber also use it ... there are definite class aspects
In some cases, the growth of a platform can be facilitated by an effect we call side switching. This occurs when users of one side of the platform join the opposite side—for example, when those who consume goods or services begin to produce goods and services for others to consume. On some platforms, users engage in side switching easily and repeatedly.
Uber, for example, recruits new drivers from among its rider pool, just as Airbnb recruits new hosts from among its guest pool. A scalable business model, frictionless entry, and side switching all serve to lubricate network effects.
interesting that they say people do it easily. i would love to see stats on how often people who drive for uber also use it ... there are definite class aspects