| **Type** | **Description** | **Examples** | **Category** |
|------------------------------|---------------------------------------------------------------------------------|--------------------------------------|--------------------|
| **Direct** | Value increases as more users join. | Telephone networks, Facebook | Network |
| **Indirect** | Value increases due to complementary products or services. | Video game consoles, App stores | Network |
| **Two-Sided** | Value increases as both sides of the market grow. | eBay, Uber | Marketplace |
| **Data** | Value increases as more data is collected and utilized. | Waze, Yelp! | Data |
| **Tech Performance** | Technical performance improves with more users. | BitTorrent, Skype | Technology |
| **Social** | Value increases through social interactions and psychology. | Language, Belief, Bandwagon effects | Social |
| **Asymptotic** | Network effects with diminishing returns. | Uber, Lyft | Network |
| **Personal** | Value increases with personal connections and utility. | Facebook, LinkedIn | Personal |
| **Market Network** | Combines elements of marketplaces and social networks. | HoneyBook, AngelList | Market Network |
| **Platform** | Value increases as more developers and users join. | Windows, iOS, Android | Platform |
| **Brand** | Value increases as brand recognition and loyalty grow. | Apple, Nike | Brand |
| **Embed** | Value increases as the product becomes embedded in other products or services. | PayPal, Stripe | Embed |
| **Scale** | Value increases as the network scales, reducing costs and increasing efficiency.| Amazon, Google | Scale |
## thoughts
- dating x network effect - nodes want to join your network if your network is good enough
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## zz
![[Pasted image 20240122192245.png]]
1. Introduction to network effects and the importance of understanding them
- Network effects are important to value creation and understanding many systems
- This masterclass will teach about network effects and how to apply them
2. Types of network effects and network structures
- Different types of network effects behave differently
- Networks have nodes, links, sizes, densities and other properties
3. Historical context of network effects
- Network effects have always existed but recent technologies allow their study
- Understanding of network effects has evolved over decades
- Language and theories to describe network effects are emerging
4. Examples of powerful network effects
- Goodreads built a large reader network that Amazon had to acquire
- WhatsApp's strong network effect led to its large acquisition
5. Defining network effects
- Basic definition is that every new user adds value to other users
6. Early examples of network effects
- Marketplaces and telephone networks demonstrated early network effects
- Microsoft benefitted from unforeseen platform network effects
7. Distinguishing network effects from viral effects
- Network effects create retention and value, not just growth
- Many past companies relied on viral growth without network effects
8. Challenges of building network businesses
- Cold starts, chicken-and-egg problems, multi-tenancy, disintermediation
9. Negative network effects to avoid
- Congestion and pollution can degrade network experience early on
#entrepreneurship #business