A network effect is what happens when products get more valuable as more people use them. For every additional user, the product gets more valuable for every user who already was on the product of the platform. In 19 o eight, there were five million phones in the united states and most of these phones were operated by a company called american telephone and telegraph,. also known as a t and t. A phone without a connection at the end of the line is not even a scientific instrument or toy - it's one of the most useless things in the world.