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)

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, [...]
Linux won the servers, but dead on desktop
LC
Last modified on October 5, 2015 at 4:47 pm
Linux is present in very different markets where it has had vastly different results. What explains those differences?
Strava: Social Fitness Veteran
(Wo)Man in the Arena
Posted on October 2, 2015 at 4:25 pm
Strava builds an incredibly loyal and growing community of competitive "everyday cyclists" who are increasingly obsessed with the digital leaderboard.
Is Nextdoor the next big social network?
Yannis
Posted on October 4, 2015 at 8:37 pm
At $1bn valuation, reaching 1/3 of U.S. communities, private social network Nextdoor has come a long a way. The company's targeted, private approach has enabled it to build a tight community of engaged users. The platform has strong network effects [...]
IMG’s three pronged network effect strategy
AlonKremer
Posted on October 4, 2015 at 11:33 pm
IMG is a sports talent agency that uses a three pronged network effect strategy to attract more athletes, agents and advertisers to beat its competitors.
Skype: how a Northern European peer-to-peer software has conquered the world thanks to network effects
europeanfederalist
Posted on October 4, 2015 at 11:16 pm
Once the ultimate savior of long-distance relationships (no matter what their nature is), Skype has been increasingly challenged by new digital players, What's app in particular. How did Skype make itself so relevant, and how does it capture enough value [...]
IBETCHA Want Network Effects
ecashman
Last modified on October 5, 2015 at 11:57 pm
Hobby games are booming and they're making the jump online in search of network effects.
From the Windoooows to the MALL – Mall of America in the Digital Era
Won't Not
Last modified on October 4, 2015 at 6:41 pm
Mall of America has been able to digitally amplify its massive direct and indirect network effects to remain a tour de force of brick and mortar shopping.
Shut out: Can Meerkat win the mobile live streaming war?
moniguzman
Posted on October 5, 2015 at 11:35 am
In March, techies (myself included: http://www.geekwire.com/2015/why-meerkat-is-going-to-make-it/) went wild over a new kind of live streaming. A startup called Meerkat launched a mobile app that let users broadcast high quality live video to the world straight from their phones, using Twitter [...]
Etsy – Beyond Brands and Boarders
Mor Sidi
Posted on October 2, 2015 at 4:37 pm
It is suddenly worth it to be a designer - who would have thought that I could broadcast my designs all over the world?
Same network effects responsible for Amazon’s rise might lead to its undoing
Jon Malankar
Last modified on October 4, 2015 at 8:42 pm
Amazon is the original two-sided marketplace.  While Amazon’s initial model involved warehouses and stocking every book in history, Amazon really took off when it became the internet’s primary storefront.  I acknowledge that Amazon still has lots of warehouses and many [...]
Waze – Generating Better Maps through its Network of Users
JG
Posted on October 2, 2015 at 11:12 am
Through a virtuous cycle, Waze has built a large user-base which functions as both the suppliers and consumers of traffic information.
GrubHub: Seamlessly Taking Over Delivery?
CEA
Posted on October 4, 2015 at 2:21 pm
Leveraging two-sided network effects, GrubHub has established a solid grip on the meal delivery service industry. With many new entrants, however, the industry may be becoming commoditized, and the strength of these network effects will soon be put to the [...]
Getting on the Lyst
uilc
Posted on October 3, 2015 at 3:29 pm
Lyst.com is an online shopping aggregator that has created a network of brands and users totaling annual sales of $2B
LevelUp: A Rewarding Network $$
mtv0302
Last modified on October 5, 2015 at 1:05 am
LevelUp, a mobile-first payment and customer loyalty platform is channeling multiple network effects and value capture decisions to disrupt the point of sale experience for consumers and merchants.
DogVacay: Building a Network of Dog Sitters
Fisher
Last modified on October 5, 2015 at 11:38 am
DogVacay's multi-sided platform connects dog owners and sitters, and eliminates the need for expensive and unnatural kennels.
Nextdoor to Replace Yelp?
Julie
Posted on October 4, 2015 at 8:47 pm
Nextdoor is creating virtual neighborhood communities with lucrative demonetization opportunities.
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