Competing with Network Effects

October 04, 2015

Read The Full Prompt

One consequence of the digital transformation of the economy is that many industries today are exhibiting network effects.

For this module please pick ONE company/organization and discuss how networks effects may affect its value creation, value capture and/or operating model and/or how it can take advantage of network effects to grow its business.

Issues you may want to address (feel free to consider other related issues not listed below):

– How to scale up businesses that exhibit Direct Network Effects?

– How to scale up businesses that exhibit Indirect Network Effects?

– How should incumbent firms compete when their industries become susceptible to network effects?

– How can an entrant take over market leadership when competing with an incumbent in a networked industry?

– How can product-centric firms grow into platform-centric firms?
Create an approximately 500-750 word post to make your contribution. Please create appropriate tags for your post. Please also respond to and comment on three other posts per module. Feel free to use graphics, data, videos and links to other sites to corroborate your points.

Note: Since our third module is on crowd-based business models (business models that leverage collective intelligence from a large number of users), please do not pick crowd-based companies such as Kickstarter, Wikipedia, and Threadless for this OK blog post.

Submitted (138)

Just Venmo me.
Last modified on October 19, 2015 at 6:10 pm
Venmo uses network effects to make social network their business.
Flatiron: Fighting Cancer Online
Emilie Valentova
Last modified on October 5, 2015 at 8:37 pm
Flatiron Health is powering the most advanced cloud-based oncology software to support cancer care. It received $130 million from Google Ventures in 2014. Since, Flatiron has embarked on an exponential growth track pulling thousands of the best oncologists and cancer [...]
Handy: Turning Product Into Platform
Last modified on October 5, 2015 at 5:29 pm
Busy “yuppies” with messy apartments used to be stuck with two unappealing options: either go for an expensive cleaning firm that often caters to commercially managed buildings or the gray market where immigrants with questionable legal statuses work for below [...]
Tribe Vibes: The Cult of SoulCycle
Last modified on October 4, 2015 at 9:01 pm
The most prevalent criticism of SoulCycle is that it is a cult, but this is perhaps the highest compliment for a business built on network effects.
Duolingo: Sheer Genius
Last modified on October 19, 2015 at 6:10 pm
I have wanted to learn Spanish for a while now, and that was why I started looking into Duolingo. I started the research thinking it’s just another language learning program. But boy was I wrong.Value creation – For students (users) Duolingo [...]
Lending Club – Pioneering P2P Lending
Last modified on October 4, 2015 at 7:01 pm
Lending Club is the world’s largest online marketplace for connecting borrowers and investors. Through its innovative online platform, the company is able to pass on a portion of its savings to investors and borrowers because of its substantially reduced need [...]
Tinder: The dark side of network effects
Jennifer B.
Last modified on October 19, 2015 at 5:26 pm
With the proliferation of the internet and smartphones, we live in a world of unlimited options, including those related to romantic possibilities. Due to network effects, there is a new source of value creation and capture in the dating world. [...]
Nike – from products to platform
Last modified on October 5, 2015 at 12:45 pm
While I was interning in Seattle this summer, I learned from a friend — who happens to be both a software developer and a fitness enthusiast — that she had applied to “enroll” her startup idea with the Nike+ Accelerator [...]
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