Shower thoughts on Networks
and human psychology
Network effects are interesting at the network level but also at the individual level. At the individual level, it’s really about psychology of people. People like their defaults and habits stick. Social proof is a huge one; others are using X, I should use X too! Social capital/status is another big one, what does using this product tell the world about me?
Building a product and subsequently company is deeply tied to psychology because it’s these individual behaviors that in aggregate define the rules of the network — emergent properties. And the network is what creates a powerful and sustaining business.
Another note, the reason you don’t want to charge/make money early on is because charging people greatly reduces the virality of the product. You need the virality in the beginning to build and win the network. Once you have the network, competitors are locked out, and then you can start charging.