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)

Apple Watch: Betting on the Apple Ecosystem
Atima Lui
Last modified on October 4, 2015 at 5:52 pm
Why Apple Watch will be the leading platform in wearables
How clever is Clever?
SEA8
Last modified on October 5, 2015 at 11:08 am
Clever's multi-sided data sharing and learning application platform for K12 school districts
“Fasten” Your Seatbelts – Gunning for Uber Late in the Game
Austin
Posted on October 4, 2015 at 10:44 pm
New startup Fasten looks to disrupt Uber's dominance in Boston by eliminating surge pricing and taking fixed $1 cuts from drivers
Get In Ma Belly: How A Little Blue Card Helped Out Mom & Pop
John R
Last modified on October 4, 2015 at 3:46 pm
Chicago-based Belly Card (commonly known as Belly) is rapidly transforming customer loyalty space for SMBs and may soon make store-specific loyalty cards obsolete. Belly’s tremendous growth epitomizes what is possible by leveraging multi-sided, localized network effects, silly name be damned.
Pandora: The More You Listen, The Better It Gets
Asaf Lifshitz
Posted on October 3, 2015 at 3:37 pm
Whenever a user likes a new song, Pandora’s playlist choices improve for ALL uses
WhatsApp — Network effects worth $19 billion?
KMY
Last modified on October 19, 2015 at 5:26 pm
WhatsApp has the potential to leverage extremely sticky network effects for untapped revenue potential
EdX – learning for anyone, anytime, anywhere
Jenny Chiu
Posted on October 4, 2015 at 6:50 pm
How they help global learners to increase access to some of the best learning contents in the world
BlackBerry: Too Reliant on Network Effects in the Face of Better Products
Jason Preston
Posted on October 3, 2015 at 10:21 am
Network effects don't defend against significantly better products (or: you still have to create value for the user).
TripAdvisor: Book the Perfect Trip
HBSSectB
Last modified on October 4, 2015 at 8:54 pm
TripAdvisor is the largest travel site in the world, with a mission to help people plan and book the perfect trip. TripAdvisor accomplishes its goal by offering users a platform that aggregates user-generated reviews and opinions about accommodations, destinations, activities [...]
Luxe – On-demand valet service anywhere you want*
Matt
Posted on October 4, 2015 at 9:56 pm
Never search for parking again! Luxe provides an easy to use on-demand valet service that will change the way you park in major cities.
Napster – The Start of Something Big
gscoon
Last modified on October 5, 2015 at 12:13 am
On June 1, 1999, Shawn Fanning launched Napster, a service that allowed computer owners to easily share music files across the internet.  Within a few months of its launch, 4 million songs were in circulation and in less than a [...]
Apple Pay: Living up to the Hype?
Mike Maley
Last modified on October 19, 2015 at 6:10 pm
Explores network effects in Apple Pay and why adoption to date has been lower than expected.
Easy Taxi: “Disrupting minimizing the disruption”
Mati G
Posted on October 3, 2015 at 3:48 pm
Easy Taxi has grow successfully in emerging countries, primarily in Latin America. They have created a disrupted business model that adapts to local reality
DoorDash is Leveraging Network Effects to Fight Hangriness
Noam
Last modified on October 5, 2015 at 10:00 am
DoorDash is attempting to disrupt the food delivery market with a service that enables users to order in from almost any restaurant in their area. The key to their success is network effects, but one question remains: can they do [...]
The Fitbit Fad?
s
Posted on October 4, 2015 at 8:32 pm
Fitbit owes its success to strong direct network effects, but its survival depends on the establishment of a strong indirect network.
The Knot : Maximizing Value in an Evergreen Industry
JL
Last modified on October 19, 2015 at 6:10 pm
“Amazing news! Congrats! Where do you want to get married? Have you thought about destination wedding? Are you thinking Spring or Fall wedding? What color will your bridesmaids will wear??” – My future mother-in-law…30 minutes after my fiancé proposed. Planning [...]
Eventbrite: Transforming from a Ticketing Provider to an Event Discovery Platform
ctm
Last modified on October 19, 2015 at 5:26 pm
In less than 10 years Eventbrite has established itself as a major force in the ticketing industry. Longer term, the company’s ultimate goal is to become not just a technology provider for individual ticket sellers, but rather a robust discovery [...]
TripAdvisor: A Network for Vacation Bliss
HBStudent2016
Last modified on October 3, 2015 at 10:49 pm
TripAdvisor has started to dominate the online vacation ecosystem with its large user base and acquisitive business model.
OpenTable: A New Reservation Every Two Seconds
guillermop
Last modified on October 19, 2015 at 5:26 pm
Open-Table was the first mover into the online and mobile restaurant reservation space and is still the industry leader. The space is strongly influenced by network effects, which OpenTable is hoping to leverage to capture even more value and cement [...]
thredUP utilizing network effects
Esty
Last modified on October 19, 2015 at 6:10 pm
thredUP owners increased their control of the multi sided platform by transferring it from a marketplace to a re-seller and grew their network by utilizing direct and indirect network effects. However, they are still at risk of imitation and substitute, [...]
Yoga Panda – introducing network effects to the yoga industry
Pinky and the Brain
Last modified on October 19, 2015 at 5:26 pm
Yoga Panda, though a small, Seattle-based start-up, has introduced network effects into the yoga industry.
Calling All Babysitters & Nannies
DB
Last modified on October 4, 2015 at 8:57 pm
Care.com is a two-sided marketplace that matches caregivers to people seeking care. Think babysitters, nannies and more. They have managed to become the world’s largest online care destination servicing 9.5 million members in 16 countries. How they scaled When Care.com [...]
Coursera: using network effects to build access to education
Sherry
Posted on September 30, 2015 at 5:54 pm
Coursera is leveraging network effects to expand both its user base as well as the quantity and quality of content on its platform.
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