network

I’m reading the book Platform Revolution to better understand how platforms change markets. For the longest time, I thought that network effects and virality were the same thing. However, according to the authors:

“Virality is about attracting people who are off the platform and enticing them to join it, while network effects are about increasing value among people on-platform.” (23)

Listen to this blog post here! Network Effects and Virality

I had assumed that what attracts people into a network is the value they get from the network. But in fact, this oversimplifies the interaction between user and platform. The reason for joining could be the same as sticking around. But often, it isn’t.

Suppose a marketing initiative gives users $10 to refer a friend to join. Or, registering could require the user to input their contact list to the platform, to be used for more invites. These examples show virality to grow a network, but not value creation within a network. Just because a platform has a network and goes viral, does not mean that it adds value to users upon joining. Virality used to get more hype, with value coming from how fast you could grow. But now, the value of platforms comes from how they retain users just as much as obtaining users.

Network effects depend a lot on the platform itself. For YouTube, virality could be sharing a video link. But network effect benefits would be the improvement to the video recommendation algorithm coming from more behavioral data from more users. This recommendation keeps users coming back.

It’s possible that a platform has both virality and network effects, such as Facebook: people joined Facebook because of the viral effect of “Fear of Missing Out.” Our friends were connected, so we wanted in as well. Once online, people stayed on for additional features like Facebook Groups and Facebook Marketplace, which grew more valuable as more people joined. Now, the long-term value of Facebook is “active” users, not just “new” users. And activity comes from those valuing the service and going back for the network effects.

As I continue learning about platforms, I’ll pay more attention to the difference between why to join a network vs. why to stay on it.

In August, 2018, I realized that I need to do a better job keeping in touch with colleagues: both my friends and professionals. I listened to a podcast Manager/Career Tools about networking and decided to use some tools to help me network, instead of just letting luck and vicinity dictate who I talk to.

I set recurring reminders on my calendar to keep in touch with folks every few months. When I get the reminder, I send out a message. Or if I delay, I just shift around the event or push it back. Of course I leave spontaneity open; if I end up talking to someone prior to their next reminder, I just shift the following reminders to start from there.

This works for both personal and professional networks. I often add new people to the list to keep in touch. I also write down people’s birthdays when I hear them. It’s nice to receive a birthday wish nowadays. I can’t rely on Facebook for birthdays anymore, since my generation uses Facebook less.

Staying in touch with friends is great. Our lives are so busy all the time. But I hate that word “busy”. We have so much stress and urgency from the immediate surroundings that we don’t step back and consider the non-urgent, meaningful things.

Set a recurring reminder and reach out. They’ll appreciate the thought.