Sustainable Growth Through Network Effects

by Laura Bârlădeanu

1. James Currier, Managing Partner at NFX Guild

1.1. @JamesCurrier

1.2. https://www.linkedin.com/in/jamescurrier

2. What are network effects?

2.1. Every user adds value for the other users

2.1.1. Product examples: FB, ebay, paypal, linkedin, airbnb, etc.

2.2. They're NOT viral effects

2.2.1. The new users directly influence the amount of active users

3. Your products must have defensibility

3.1. Scale

3.2. Embedding

3.3. Brand

3.4. Network effects

4. Using network effects in your business

4.1. 1. Have a core network effect

4.1.1. Does user #2 make it better for #1? Does the #1000th?

4.1.2. If your products doesn't already have network effect, stop and rethink your product with network effects at its core

4.2. 2. Network effect product design

4.2.1. Build new features with the network effects in mind

4.2.2. Referral systems

5. 11 different network effects

5.1. 1. Personal utility

5.2. 2. Personal

5.3. 3. Direct

5.4. 4. Market network

5.5. 5. 2-sided marketplace

5.6. 6. 2-sided platform

5.7. 7. Asymptotic marketplace

5.8. 8. Data

5.9. 9. Tech performance

5.10. 10. Bandwagon

5.11. 11. Language