Adam L Penenberg, Viral Loop
Ebay was one of the first internet networks to create it’s own ecosystem. Now, more than a million people worldwide earn their sole income as eBay sellers. Add to this the millions of buyers and the forest of other suppliers offering products, postage and packaging. As the range of goods increases, this attracts more potential buyers to the network.
Action : Instead of merely selling one thing, eBay created the vehicle to sell anything and everything to anybody. How can you automate or turn your service into DIY or self-service? How can you create the market rather than just the goods for sale?
Google takes advantage of network effects in multiple ways. The more you search the better your search results. The more people that search, the more people that advertise. And, the more people that advertise, the higher the price per ad. Thus for Google, the more people who use their service the more money they make.
Action : How can you apply network effects in your organization? The key question to ask is: What happens when we scale this up? Does the system get better or reach breaking point? Using technology, explore ways to break through the limit in scale.