A note from Daniel

Come for the tool, stay for the network: The tool helps a service reach a critical mass, at which point network effects can kick in. Over time, the alternative network becomes more valuable than the preexisting networks—and harder for competitors to replicate. The tool might get better as the company adds features, but the value of the network increases much more rapidly, at a compounding rate. Today, many services host videos for free, but YouTube stays ahead because the service has such a large audience—which is to say, a large network. The tool is the hook, but the network is what creates long-term value for users and the company.

Daniel Read Write Own, page 33 · February 28, 2024 Save to shelf
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