Types of Network Effect
There are several types of network effect that should be properly understood:
- Direct network effects: they occur when the number of users has a direct impact on the value of a product.
- Indirect network effects: they occur in two-sided (or multi-sided) products where the size of one user group affects how valuable the product is to another user group.
- Data network effects: describes products which become better with more users via the data those users generate.
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Software engineer by 🌞 and sleepyhead by 🌑. Software architecture. Distributed systems. Personal productivity. Cats.
We all know that, the more a product is used, the more it will be used. The problem is that, our understanding of this phenomenon is quite limited. What if we tried to better understand the dynamics behind it? This article is a great read for anyone that would like more insights on this interesting topic.
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