The NFX Podcast
Ep. 5 - Network Bonding Theory (NFX Masterclass)
Nov 9, 2022
Learn about network bonding theory and how to build network effects startups. Topics discussed include turning companies into networks, compensating nodes with non-fungible tokens, network-on-network competition, and examples of network bonding and attacks.
22:06
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Quick takeaways
- Startups should view themselves as networks and focus on bonding people to their network for added value.
- Compensating nodes within a network is critical and can be done through various forms such as product value, cash payments, equity shares, and more.
Deep dives
Understanding Network Bonding Theory
Network bonding theory is the foundation for understanding how networks are formed. The podcast emphasizes the importance of viewing startups as networks and highlights the need for founders to bond people and assets to their network. Concepts such as implicit mathematical equations and compensating nodes to promote network growth are explored. The podcast emphasizes the shift from single-player games to multiplayer games and encourages founders to consider how to add other people into their network. The episode provides examples of different types of nodes in a network and discusses the asymptotic decline in equity compensation as the network grows stronger.
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