Network effects

A network effect exists when each additional user makes the product more valuable to every existing user.

Assessing a network effect means asking:

1. Whether new users add value to existing users, or only add revenue.

2. Whether the effect is global or local — the whole network, or one cluster inside it.

3. Where the effect turns negative through congestion, noise, or falling quality.

Growth is not a network effect unless users make the product better for each other.