#38 - James Currier : Why Network Effects Are the Hidden Architecture of Civilization

We're joined by James Currier who explains how ‘network effects’ shape our economies, tech, civilisation and how to master that to our advantage.

James is a five-time Founder, an angel investor in DoorDash, Lyft, and Patreon, and a Founding Partner at NFX. Before becoming an investor, James was the co-founder and CEO of Tickle, one of the internet's first successful user-generated companies.

From Metcalfe’s Law to the rise of AI-powered startups, we explore how the invisible laws of networks explain why some companies scale exponentially while others fade out and why understanding these forces is key to building anything lasting in the 21st century.

James has backed some of Silicon Valley’s most iconic startups and coined frameworks that are now industry standards. From early internet marketplaces to AI agents and Web3 protocols, his insights map out how startups win by designing for virality, defensibility, and system-level scale.

We dive into:

• The 17 types of network effects; from marketplaces to expertise networks, and how to build them into your product.

• The collapse of traditional moats in the digital age and what defensibility means in the era of AI.

• Why companies like OpenAI and Salesforce are embedding themselves into users’ lives to build lasting leverage.

• The rise of “3-person unicorns” and how AI is accelerating startup formation and shrinking team sizes.

• How founders can think about viral growth in a world where old playbooks (like Craigslist hacks) no longer work.

• Lessons from failure: why even with network effects, execution is everything.

• What AI bubbles mean for value creation and why James loves them.

• How to survive and thrive in a noisy world: hitting it hard, identifying “technology windows,” and creating high-leverage product experiences.

Key Takeaways from the Episode:

1. Network Effects Are the New Physics of Business:

James breaks down why 70%+ of value in tech comes from companies that embed network effects and why founders need to build products that get stronger with every new user.

2. 17 Distinct Types of Network Effects:

From classic telephone lines to software platforms and even Toyota’s repair ecosystem, we explore the taxonomy of modern network effects, including marketplace, platform, expertise, and embedding effects.

3. Defensibility in the AI Era:

With generative AI becoming a commodity, the real moat is not the model but embedding, data ownership, and network density. OpenAI’s memory feature, for example, is a classic embedding play.

4. How Salesforce, Uber, and Facebook Reinforce Their Moats:

Learn how these giants layered multiple defensibilities scale, brand, embedding, and networks to dominate their markets.

5. The “Technology Window” Model:

Massive companies are born not from marketing innovation but from catching the right tech wave just as we saw with the internet, social media, and now AI.

6. What Most Founders Get Wrong About Virality:

It’s not about shouting louder, but about building value that spreads organically through “shrew-like” constant motion experimenting, iterating, and finding attention before the channel closes.

7. The Rise of AI-Native Companies:

The best startups of the 2020s will be “AI-first,” doing with 3 people what used to take 300 reshaping business models, hiring, and even venture capital itself.

8. Why Founders Must Love the Craft, Not Just the Exit:

Great companies are built by people obsessed with the product and the mission not just chasing valuation multiples.

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Timestamps:

(00:00) – Introduction to James Currier and the importance of network effects

(02:15) – Metcalfe’s Law, Reed’s Law, and why networks explain society

(04:05) – How 70%+ of tech value comes from network effects

(07:50) – The 17 types of network effects (and why expertise matters)

(12:20) – How Salesforce embedded defensibility through platform strategy

(16:55) – Investing in businesses that build network effects

(18:45) – Network effects vs. AI commoditization: what really matters

(23:05) – Why defensibility is about product strategy, not hype

(27:30) – The coming wave of “3-person unicorns”

(31:00) – Will UBI be necessary? James predicts capitalism will adapt

(34:00) – How product quality = speed to value (not just shipping fast)

(36:30) – The evolution of viral growth tactics in a noisy world

(40:45) – The “technology window” thesis: where real leverage comes from

(44:20) – Thoughts on crypto, Web3, and reinventing finance

(46:10) – What motivates great founders (hint: it’s not money)

(49:00) – James’ advice to young people on STEM, self-awareness, and emotional intelligence