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Google Video was originally positioned as the Authorities providing TV. Its brand was convoluted. Remember in-video audio search? It was never about user sha

by jdunck 18y ago

Google Video was originally positioned as the Authorities providing TV. Its brand was convoluted. Remember in-video audio search? It was never about user sharing. It was never about me. YouTube is sort of a special case, in that it has obvious network effects, and pretty much anyone that corners the market has a lock. eBay, Amazon, delicious, etc. We continue to be surprised by the network effect. So perhaps the interesting question when you find yourself asking "so what?" is "does this have critical mass and a network effect in play?" Go read Wealth of Networks. ;-)

nostrademons 18y ago
The vast majority of network-effect businesses are very difficult to tackle, though, because: 1.) If it's already apparent that this is a viable business, then there's probably already an entrenched player, and the network effect serves to keep you out. 2.) If it's not already apparent that this is a viable business, then prospective users are like "Why should I bother?" and you never get the initial critical mass. After all, if the utility of the service grows with the square of the number of people, then the utility for the first person is zero and they have no reason to begin using the service. It seems that most firms that overcame the initial network effect did so through a combination of blind luck or leveraging other assets. For example, YouTube's traffic hovered around zero until they got SlashDotted. EBay was blind luck - Pierre Omidyar figured he'd run an experiment on creating the perfect marketplace, and it turned out people sent him money. Digg used Kevin Rose's TechTV audience to seed the initial site. FictionAlley had the most popular HP fanfiction author as one of its founders, and she pulled her fanfiction off all other sites and hosted it exclusively on FictionAlley. Microsoft lucked out on the IBM deal and then leveraged that to gradually increase their monopoly over the PC industry.
- jdunck 18y ago
  You're sort of arguing against yourself here. In the scheme of things, the sort of blind luck of getting slashdotted or having a significant blog market is nothing compared to the general effort put into startups. Think of something that work win if it had a network. Think of a way to seed the network. FTW.

by jdunck 18y ago

nostrademons 18y ago

The vast majority of network-effect businesses are very difficult to tackle, though, because: 1.) If it's already apparent that this is a viable business, then there's probably already an entrenched player, and the network effect serves to keep you out. 2.) If it's not already apparent that this is a viable business, then prospective users are like "Why should I bother?" and you never get the initial critical mass. After all, if the utility of the service grows with the square of the number of people, then the utility for the first person is zero and they have no reason to begin using the service. It seems that most firms that overcame the initial network effect did so through a combination of blind luck or leveraging other assets. For example, YouTube's traffic hovered around zero until they got SlashDotted. EBay was blind luck - Pierre Omidyar figured he'd run an experiment on creating the perfect marketplace, and it turned out people sent him money. Digg used Kevin Rose's TechTV audience to seed the initial site. FictionAlley had the most popular HP fanfiction author as one of its founders, and she pulled her fanfiction off all other sites and hosted it exclusively on FictionAlley. Microsoft lucked out on the IBM deal and then leveraged that to gradually increase their monopoly over the PC industry.

jdunck 18y ago
You're sort of arguing against yourself here. In the scheme of things, the sort of blind luck of getting slashdotted or having a significant blog market is nothing compared to the general effort put into startups. Think of something that work win if it had a network. Think of a way to seed the network. FTW.