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Concept
Network effects
A network effect is when something becomes more valuable as more people use it. The value comes from the connections, not just the product itself.
Why it matters
Network effects turn growth into a moat, but they are slow to start and cannot be faked into existence. Early on, they look like almost nothing.
Common misconceptions
- That network effects are automatic with scale. They require the connections to actually create value.
- That they can be manufactured. They can only be earned, one real connection at a time.
How it connects
- CommunityCommunity is a network effect with belonging.
- DistributionNetworks distribute your work for you.
Essays exploring it
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Books that shaped my thinking
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Case studies applying it
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