Network effects! Everyone has heard they are useful, but how much do you really know about them and how do you get the ‘flywheel’ spinning? In a16z Podcast, partners Anu Hariharan and Jeff Jordan (who invest in marketplaces, consumer, and more) share with Sonal Chokshi their observations, insights, and experiences.
One of the biggest misconceptions around network effects (which are one of the key dynamics behind many successful and highly defensible software companies) is confusing growth with engagement. So how does one
- Tell the difference between viral growth and network effects?
- How does one create network effects in different businesses?
- How do you know when to hang in there because you see signs of network effects or just drop it and move on to something else?
- And what are some examples of teasing all of the above apart?
There are some interesting learnings:
- How Mark Zuckerburg think about network effects
- How people need to work to build the network effects
- How Open Table built out their startup “Come for the tool, stay for the network” and their one big growth hack
- Can you measure product/market fit if you are not close to your users (Lessons from Whatsapp)
- Some hacks for Airbnb to get going
- Why you need to prove a market outside of the Valley
- How instacart got kicked off with supermarkets to kick things off
- When to monetise and how to think about it
Network Effects Podcast
Looking for something interesing to read?
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- Should I talk to my startup competitors and their investors?
- Shrinking a market and owning it
- The real reason to launch faster (not talked about)
- Your solution is not my problem
- A meaningful founder exit is not the same thing for venture capital