Network Effects are the foundation of many great Silicon Valley technology companies/ You need users to make a product work – network effects are the results of positively connecting people through technology which organically makes that technology better.

The “effect” part of the network effect describes how value increases as more people start using the product. Sometimes the increasing value manifests as higher engagement, or faster growth. But another way is to think about it as a contrast—at its beginning, YouTube didn’t have any videos, and neither viewers nor creators would find it valuable. B

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Network effects are defined as when the value of a company’s product or service increases as usage increases.That means the more users you have, the happier they are, and the cheaper it is to acquire new ones, which means your growth accelerates. Accelerating growth means exponential growth. You want to invest in and work at businesses that grow ex... See more

First, does the product have a network? Does it connect people with each other, whether for commerce, collaboration, communication, or something else at the core of the experience? And second, does the ability to attract new users, or to become stickier, or to monetize, become even stronger as its network grows larger?