Scale your startup with network effects
Warm up: Draw a WOW'ed user that just used your product
What are network effects?
- The value of a product or service increases when the number of people who use that product or service increases
- Example: The more of your friends using Whatsapp/Facebook - the more valuable the app becomes for you.
Three parts of network effects
- The acquisition effect
- The engagement effect
- The economic effect
- The Acquisition Effect which allows products to tap into their network to drive growth in users more cheaply as the network grows
- How Tinder arranged parties
- How Paypal made use of Ebay
- Hotmail and Iphone on emails
- How Airbnb used Craigslist to kickstart their network
How might we super charge some acquisition effects
The engagement effect
- The Engagement Effect which involves user engagement going up as the network grows
- The nature of reengagement with recurring meetings on zoom, meet, teams, whereby!
- Stickiness - The natural reengagement effect of slack
How might a user reengage with your product?
The economic effect
- The Economic Effect which involves monetization rates going up as the network grows.
- How Uber needed lots of drivers to kickstart the local network - subsidise fixed salaries or large bonuses to drive for uber and not a competitor
- How you might subsidise the "hard" side of the network in order to solve the cold start problem
How might we use money to kickstart our platform?
Inspiration by examples
- Airbnb is a global network because people travel over far distances
- LinkedIn is a network of local networks.
- Slack is a network of networks. One channel = 1 network
How might we use our networks to scaling out of our first local network? (Perhaps with network of networks?)
Great job guys! Not there is only one thing we need to do!