Platform & network effects · strategy atlas
Network effects
what it means
A product that becomes more valuable to each user as more people join it — turning growth itself into a defensive moat, since a large existing network becomes hard for a new entrant to replicate.
a real example
Communication and social platforms are the clearest example: a messaging app with none of your contacts on it has almost no value, no matter how well-designed it is.
when to use it
Products whose core value genuinely increases with more users (communication, marketplaces, communities) — not every product has this property just because it's popular.
when it backfires
Claiming 'network effects' for a product that's just popular, without a real mechanism where more users make it better for existing users, overestimates how defensible the growth actually is.
put it into practice