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  • Writer's pictureThe NTWK

💊 Daily Learning: TheNTWKPill “What are network effects and why are they so important?”

from #TheNTWKTalk “How to launch and build a successful marketplace business”, by Juho Makkonen

Do you want to know what are network effects and why are they so important? Watch what Juho Makkonen told to us:


1. Network effects: a platform becomes more valuable the more people there are

2. At some point, when you reach a certain size, a flywheel is created that grows itself, and parties keep coming because they understand that it is the place to be

3. Network effects are not a growth strategy in itself, but a defensibility strategy: once you get a marketplace to a certain stage it is very difficult for a competitor to come in and conquer that market

4. Marketplaces build competitive advantage through network effects

For more on this topic, follow Platform Economy and Business Ecosystems and access the full🎙🎙Recording Session on TheNTWKEvents Node


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