I think we are about to exhaust the Network Effect as the basis for growth. There is far more to achieving 'unicorn' status however the network effect is a great foundation. If is your first time with us make sure you review the show notes or podcasts from weeks 1 - 5.
EPISODE 21: THE WINNERS
The Network Effect is one of the most powerful forces in the market. Since the early 1990's 70% of value in Tech is driven by the network effect. Companies that leverage the network effect have tremendous upsides because cause and effect is asymmetrical. Large investments at the beginning that had little to return has reversed and small investments now lead to huge returns.
EPISODE 22: THE LOSERS
The challenge with building supply demand at the sale time starts with pricing. The second issue is the failure to build trust which is followed by not paying to the competition - currently or new market entrants. Finally being last to the feast is the final reason for failure.
Our focus will be on the first 3.
EPISODE 23: THE START FROM ZERO PROBLEM
The same forces that make the network effect powerful once scale is achieved is the same reason it is so difficult to start - do you have the time and resources to scale?
Network effect means everyone gains from the addition of another member, when you don't have enough members (nodes) the network has little value.
EPISODE 24: THE DYNAMIC PROBLEM
As you start to scale, the issue now becomes a balance between supply and demand, the reasons for becoming a supplier or user diminishes. Growth will require recasting the benefits of membership because the gains from being in the network goes from significant to marginal.
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