Network Effects: hi, tech. Glossary

Описание: Network effects are the driving force behind companies like Etsy, Uber, Airbnb, and Amazon.

Network effects occur when the value of a product or service is increased by the number of users, sellers, and/or buyers who use it.

In this hi, tech. glossary video, you'll learn all about:

00:09 What are network effects?
00:29 Direct network effects
02:27 Indirect network effects (#google and #uber examples)

You know how, when you go to a pretty empty restaurant, they ask you to sit by the window? All the studies show that makes other people more likely to come in. If there are two equally good restaurants, with similar menus, people will choose the one that already has some people inside. Other people being in the restaurant makes the restaurant seem better. There are physical limits to this; we don’t want to go to a crowded restaurant, for example. But in the digital world, there is a lot more space to fit people in.
You might hear this referred to as homophily and social networks are big beneficiaries. You can’t not be on certain social networks if everyone you know is on there, right? I could handle my communicative needs with a few cups and some string, but I’m still on Facebook.


#business #strategy #technology