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I don't think so. It's not true that the set of good companies only includes those that would be good with only a couple hundred users. There exist a lot of c

I don't think so. It's not true that the set of good companies only includes those that would be good with only a couple hundred users. There exist a lot of companies that need lots of users to be good. That need network effects.

wellboy 13y ago
I've been thinking about this too, but which successful startups that underlie network effects worked only with several thousand users? There are market places and "solomo" apps as far as I can see, market places should work with a few hundred users (for that reason pick a niche), however nobody has managed to make solomo work yet, because all of the solomo apps only work with several thousand users in an area and it's just impossible to get to that number of users in a sustainable way. Instagram, Snapchat don't underlie network effects in the beginning really as they have circumvented the chicken and egg problem by having a great single player mode with filters in Instagram and on Snapchat you only need one friend to send funny pictures with.
- chmike 13y ago
  The bell phone network strated with less than 100 users in the beginning, as well as radios and tvs. These are all examples of very stong network effect dependent businesses. All of these businesses had at some point less than 100 users. At some point the self sustained chain reaction took place. This is what makes network effect dependent business attractive and also because one can easily grab and lock the full market keeping competitors away. The key point is how to reach the level where the chain reaction starts. For that you need tactics which increase the value with the few people available. For a phone company trying to sell phone where there is no such thing, offer a phone line to a relative with each phone line bought. Offer phone lines to service providers like doctors, hair cutters, garage, etc. This increase the value of buying a phone line. Facebook, did just that, without knowing it, by starting with Harvard students. There was high value to be part of it and the i initial people made it very attractive. This is lowering the critical mass. No one wanted to look at MySpace.

wellboy 13y ago

I've been thinking about this too, but which successful startups that underlie network effects worked only with several thousand users? There are market places and "solomo" apps as far as I can see, market places should work with a few hundred users (for that reason pick a niche), however nobody has managed to make solomo work yet, because all of the solomo apps only work with several thousand users in an area and it's just impossible to get to that number of users in a sustainable way. Instagram, Snapchat don't underlie network effects in the beginning really as they have circumvented the chicken and egg problem by having a great single player mode with filters in Instagram and on Snapchat you only need one friend to send funny pictures with.

chmike 13y ago
The bell phone network strated with less than 100 users in the beginning, as well as radios and tvs. These are all examples of very stong network effect dependent businesses. All of these businesses had at some point less than 100 users. At some point the self sustained chain reaction took place. This is what makes network effect dependent business attractive and also because one can easily grab and lock the full market keeping competitors away. The key point is how to reach the level where the chain reaction starts. For that you need tactics which increase the value with the few people available. For a phone company trying to sell phone where there is no such thing, offer a phone line to a relative with each phone line bought. Offer phone lines to service providers like doctors, hair cutters, garage, etc. This increase the value of buying a phone line. Facebook, did just that, without knowing it, by starting with Harvard students. There was high value to be part of it and the i initial people made it very attractive. This is lowering the critical mass. No one wanted to look at MySpace.