13 Jul 2020

Layering Network Effects: How to Multiply Unfair Advantages

Layering Network Effects

So far, I have discussed four different types of business models built on network effects — marketplaces, interaction networks, data networks, and platforms. Including the sub-categories I previously explained, this covers all discrete forms of software-based network effects. However, it is still not exhaustive because many startups fall under more than one of these categories. In fact, combining multiple forms of network effects, like Slack, Carta, and Poshmark have done, is one of the most effective ways to strengthen both defensibility and scalability.