Network effect
Also called: network effects
When a product becomes more valuable to each user as more people use it, helping the largest network attract still more users.
Payment systems, marketplaces and messaging platforms can show network effects. They can create strong advantages, but they also make competition winner-takes-most, so smaller networks may struggle.
Learn more in these lessons
- Competitive advantages and their limitsWhat protects a company from its competitors, and how can you tell?
Related terms
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