Stopping Network Effects
Everybody loves the feeling when their post or youtube video goes V-I-R-A-L and they are instantly famous but what happens when it goes the other way around?
Social networks out of all networks are immensely complex and difficult to analyze. The concept of strong and weak relationships (links), sentiments towards sharing information, and the ability to influence communities both positively and negatively are just some introductory topics towards studying behavior within social networks. We all have at some point come across posts or videos that went viral and of course, famous artists like Justin Bieber or PewDiePie would never come to light if this concept of “virality” never existed. So, thanks to our favorite and famous outlets such as Facebook, Instagram, Youtube, Snapchat etc which helped struggling artists become “trending stars”, and trending stars become “influencers”, and influencers become “verified”. While social networks hold the power to take a person from rags to riches in a second, they also hold the same power to destroy companies, families, norms and many more structures within the real world.
Let’s take the example of Uber — when Forbes magazine published a cover with the CEO of Uber, Travis Kalanick the title said, “Admit it, you all love Uber.” Uber started as “your private driver” and attracted crowds in masses, majority of the time due to social network effects. The trick was simple, Uber neither had drivers nor riders in the beginning (a chicken-egg problem), so they gave out incentives to attract drivers and started the new world of on-demand services. Uber’s success blew not only because of its breakthrough idea but also because it involved a network of drivers and riders (a social network at the core). Drivers and riders had the ability to influence more drivers/riders to join the network and gain more incentives as the network scaled, which in this case were lower fares, higher incomes and more flexible schedules.
This very same social network that helped Uber’s success has now presented a set of very unique and extremely difficult challenges for the company to overcome. It started first with Uber surge charges around airports during the immigration ban where people protested with #DeleteUber. Then it continued with a storm of twitter debates about Travis’ stance around immigration and his role on Trump’s business advisory council. And then followed Susan Fowler’s revelations about the gruesome workplace encounters that were silently swept under carpet but in “real world” spread like fire. And these examples go on and on, driver strikes in Bengaluru, shaken investors’ trust in Uber’s culture and now Waymo’s lawsuit on stolen LiDAR technology. Within a day, Uber again becomes the trending topic on all the social media platforms.
Uber, you’ve been hit hard!
And this is where we realize the effects of social networks, where companies like Uber once enjoyed success now have to face the same crowds, which could potentially doom them. This is not because network effects are bad but because they are actually un-stoppable. Social networks in particular, take stance and spread information useful for the society — the value that sharing Susan Fowler’s blog post offers to other women in tech industry, the value that youtube videos of driver strikes in India offer to the driver communities across the world and the value that publishing on a platform like Medium offers to Waymo — is the power of a social network. So, do not let the noise of advertisers, spammers, or fake news distract ruin the value of social networks!