There’s a broader lesson to learn from that about the products that we offer to the world in tech: Many people think that their products are very utilitarian. But I’d argue that a lot of products that people build are actually entertainment-based products.

Offering a utility to your user base is the most stable sort of long-term competitive advantage that you can have.

However, it’s also true that a lot of network-based utility only is realized at some level of scale. (As per NFX: “The simplified definition of network effects is that they occur when a company’s product or service becomes more valuable as usage increases.)

A funny example is: in LA you have these social clubs, like the Soho Club, which are elite. Only now there are actually newer clubs that are even more elite. The San Vicente Bungalows — it’s even harder to be a member than it is for the Soho Club.

That’s where status comes in.

So the question is, how do you get to that scale? There are a million networks that died out before they ever achieved that scale.

So I think it’s very critical if you’re doing a startup to understand if you are going to be offering a product that is actually an entertainment-based product — because that really widens your competitive set.

I think it’s the same with social networks like Facebook and Instagram, everything. At the level of scale that they’re at now, the status game and the sense of progression is going to be way different than it was when they were just starting out.

If we study traditional status mechanisms in society, just generally, it’s always the case that someone is always going to create something even more scarce to differentiate.