74 chunks · 52 episodes
...based software, have very little competition on a feature-by-feature basis. The network effects are so insanely strong, that any given new competitor can't just compete on the level of an individual feature or two. The feature would have to be ...
...ust with Codex and ChatGPT, but also many other apps. This creates an ecosystem network effect, making the pull towards the subscription stronger. OpenAI is just a "faceless platform" for those use cases in other apps… but users still have to p...
Using modern tech feels like living in a digital company town. Network effects mean you don't have much of a practical choice. If you want to professionally network you will use LinkedIn. There isn't a choice for a ranking algo...
Network effects in software are downstream of the silo model of today's physics of trust.
... make sense for everyone to lay cables to everyone. But also, there are natural network effects. People would want to join the biggest network. Social software infrastructure also has natural monopolies in today's physics of trust. The silo wit...
Network effects run in proportion to the user value minus the switch cost. How much do people want to join in? Once they do, how hard is it to switch to any newcome...
...aybook is about having a 6 month monopoly on a corner of PMF. But you can't get network effects to boot up in 6 days. Humans just don't go that fast, and that's the fundamental clock speed of network effects. Code used to be created by humans, ...
...will typically run hotter for the same amount of functionality. The compounding network effects get stronger because every marginal new participant now has fewer reasons to not join. The "hmmmm if I join I'll be beholden to this ever-more-power...
Network effects are emergent value. If you cut an ecosystem into separate parts, the overall value goes down super-linearly. [br]
If you're making a consumer product you have to demonstrate network effects. That's a multi-step process. If you're doing a product for enthusiasts in a category that already exists, you just have to show your thing is bette...
...arket dynamics, AI is more like microprocessors than the internet. There are no network effects, but there is utility for the very first user.
...y surplus created declines. Aggregators are better than most monopolies because network effects mean the products are better than competitors'. But that's more due to the inherent network effect than the value created by the aggregator. But the...
...ry hardy ones were left, and they could them dominate the empty territory. With network effects, it's an order of magnitude easier to grab virgin territory than take territory from someone else.
Workflows are hard to change because there's an intra and inter network effect. Inter: You need to coordinate with others. If you change the workflow but others participate in it and don't change, then you can't change it. Intra...
...users and for collections of users. This is why the aggregators have such large network effects. Via Ben Evans, from an idea by Tim O'Reilly.
Web 2.0 accidentally gave us extremely powerful aggregators. Before that, network effects were mainly individual. But Web 2.0 was about leaning into the ability of the cloud to be networks.
You can't start a network effect on a base with only bonus value. It needs to start from a nugget of primary value. Single-player value must come before multi-player value.
Your decision to use a product with network effects is not individual. Network effects make it impossible to vote with your feet. Where else are you going to go? You individually don't have a choice.
...use it." The decision is too coarse grained to steer it on smaller details. The network effects dominate the individual use cases. So everyone is stuck using the one-size-fits-none option. Same thing for a two party system, except with two opti...
AOL could ramp up its network effect faster than the open web in the early 90's. AOL was a single-sided network effect. Email, chat and IM grow in value with any user that joins. The ope...