Y Combinator Startup Podcast

#2 - Network Effects with Anu Hariharan

May 15, 2017
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INSIGHT

Network Effect Definition

  • Network effects make a product more valuable as more users join.
  • A classic example is Facebook, where more friends enhance the network's value.
INSIGHT

Virality vs. Network Effects

  • Virality focuses on the speed of growth, often unpaid, like word-of-mouth.
  • Network effects focus on value and are indicated by increased user retention.
ANECDOTE

Examples of Viral Growth

  • Facebook and Skype had viral growth because their use required other users' participation.
  • Airbnb had viral word-of-mouth growth, but using the app didn't inherently require other users.
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