You've successfully subscribed to Stewart Hillhouse
Great! Next, complete checkout for full access to Stewart Hillhouse
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info is updated.
Billing info update failed.
Making Use of The Network Effect

Making Use of The Network Effect

Stewart Hillhouse
Stewart Hillhouse

The term Network Effect was popularized by Robert Metcalfe, one of the co-inventors of Ethernet.

The Network Effect describes a situation where the value to an individual user increases as the number of other users sharing compatible products increases.

Facebook, Uber, Airbnb are all modern examples of products that wouldn't work if they didn't have the enormous scale that makes them so convenient.

What makes a truly strong Network Effect is the ability to cross-communicate with others who have a slightly different setup than you (ex. iPhone and Android can still message each other over Facebook).

Using this same phenomenon, a single person can create their own Network Effect by building a platform, serving their people, and adding new nodes to their network.

By creating a network of ideas that are all interconnected, you've essentially created a compatible service that anyone can plug themselves into.

They might come to find your work through one channel, but if it's connected (by hyperlink and relevant ideas), then they can continue to get value uninterrupted.

Rather than aggressively looking to add new people or ideas to your network early on, look to adding the right ones. These nodes will help guide your building early on and continue to strengthen over time.

Over time, your network will grow. But remember: the true value of a network comes from interoperability. Strive to keep your network (of ideas and people) connected by a common thread.

Get Smarter (Without Trying)

If you found this useful, consider joining Top Of Mind Weekly – a short email I send on Thursdays where I share ideas that are top of mind where Technology, Marketing, and Culture overlap.

Join Top Of Mind Weekly

Powered by EmailOctopus