The Network Effects Bible

Roadmap

  1. Why Network Effects Are Important
  2. How Networks Work
  3. Properties of Networks
  4. Building and Maintaining Network Effects
  5. Related Concepts

Part I — Why Network Effects are Important

  1. Physical (e.g. landline telephones)
  2. Protocol (e.g. Ethernet)
  3. Personal Utility (e.g. iMessage, WhatsApp)
  4. Personal (e.g. Facebook)
  5. Market Network (e.g. HoneyBook, AngelList)
  6. Marketplace (e.g. eBay, Craigslist)
  7. Platform (e.g. Windows, iOS, Android)
  8. Asymptotic Marketplace (e.g. Uber, Lyft)
  9. Data (e.g. Waze, Yelp!)
  10. Tech Performance (e.g. Bittorrent, Skype)
  11. Language (e.g. Google, Xerox)
  12. Belief (currencies, religions)
  13. Bandwagon (e.g. Slack, Apple)

Part II — How Networks Work

Nodes and Links

Network Density

Directionality

One-to-One vs One-to-Many

Clustering

Critical Mass

The Network “Laws”

Sarnoff’s Law

Metcalfe’s Law

Reed’s Law

Part III — Network Properties

Irregularity

Real Identity vs Pseudonymity vs Anonymity

Asymmetry

Homogeneous vs. Heterogeneous Networks

Asymptotic Network Effects

Same-Side Network Effects

Cross-Side Network Effects

Indirect Network Effects

Negative Network Effects

Part IV — Building and Maintaining Network Effects

Multiplayer vs. Single-Player Mode

Switching Costs

Chicken or Egg Problem (Cold Start Problem)

Multi-Tenanting

Disintermediation

Retention

Part V — Related Concepts

Geometric (Exponential/Non-Linear) Growth vs. Linear Growth

Viral Effects & Virality

“Platform Business Model” (Less helpful term)

Reinforcement

Scale Effects

Brand

Embedding

See what others do not. NFX is a seed and pre-seed venture firm that is a transforming how true innovators are funded.

Love podcasts or audiobooks? Learn on the go with our new app.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
NFX

NFX

See what others do not. NFX is a seed and pre-seed venture firm that is a transforming how true innovators are funded.

More from Medium

Alternative way to Capital Raising — Crowdfunding

Top VCs to Rule ALL the markets! #Tigerization

Luiz Ribeiro (General Atlantic) on the origins of GA, manoeuvring bear markets, macro outlook &…

After meeting hundreds startup founders and team in the past 6 months, there are some personal…