Network Effects in SaaS : A Desired Moat (Part 1 of 3)
The best examples from the last two decades are Google and Facebooks’s multi-sided network effects. People prefer searching and connecting with each other on these properties, so advertisers and content creators keep using them. It creates a virtuous cycle, and makes the self-interested move on every player’s part one that reinforces these companie... See more
Nathan Baschez • Dominance Friction
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
Uncharted Territories • Platforms and Aggregators
There’s certainly an argument that the more physical the network is, the more difficult it will be to reach escape velocity. The flipside is that those who do reach escape velocity will have much stronger moats compared to their virtual network counterparts. A common narrative is that software has zero marginal cost, but rarely do we talk about how... See more
0xSmac • DePIN's Imperfect Present & Promising Future: A Deep Dive - Compound Writing
The best software businesses are networks. When every new user that joins makes the network more valuable for the other users, it leads to a sort of accelerating value and growth that is one of the most powerful forces in the world. Nobody can copy the value you provide, because the value isn’t derived from your functionality, it comes from your us... See more
Nathan Baschez • Roam’s Road Ahead
Rarely in network-effects-driven categories does a product win based on features—instead, it’s a combination of harnessing network effects and building a product experience that reinforces those advantages.
Andrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
redefine it so that it’s not one singular effect, but rather, three distinct, underlying forces: the Acquisition Effect, which lets products tap into the network to drive low-cost, highly efficient user acquisition via viral growth; the Engagement Effect, which increases interaction between users as networks fill in; and finally, the Economic Effec
... See moreAndrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
I argue that there are a trio of network effects: Engagement, Acquisition, and Economics.