Waze – Generating Better Maps through its Network of Users
Through a virtuous cycle, Waze has built a large user-base which functions as both the suppliers and consumers of traffic information.
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Venmo: Building direct network effects and then…nothing happened?
Venmo has grown with strong direct network effects, but has been unable to crack the indirect network effects.
BloomNation: Working Hard for your Peonies
“To the love of my life – from your sexy husband Kevin” read the note accompanying a gorgeous bouquet of flowers delivered to my doorstep last Christmas. There was only one problem: while my husband is objectively sexy, his name is not Kevin.
Ola Cabs: The “Copy-Cat” beating Uber at its own game in India.
Ola Cabs, which built its business model on Uber’s success in the US, is significantly ahead of Uber in India with estimates suggesting an almost 80% market share to Ola. How could an India based start-up beat a giant like Uber which has expressed a strong intent to win the Indian market? What lessons can be learnt from the Ola success for other players planning a similar strategy? Is this initial success of Ola Cabs sustainable in the long term?
Styleseat: creating a two-sided platform in the fragmented beauty industry
StyleSeat has developed a two-sided marketplace for the historically fragmented beauty industry, and is betting on network effects as it prioritizes quick growth of its user base.
Daimler’s struggle to become a platform player in urban transportation
Car manufacturer Daimler, who owns the Mercedes brand, has been quite aggressive in pursuing new business opportunities in the evolving context of urban transportation. Along the way the company is shifting from a product-centric business model to a platform approach to create and capture value.
Airbnb: Reinventing hospitality with network effects
In 2008 Airbnb’s founders were having difficulty raising funds for their new idea and were turned down by many Silicon Valley investors when trying to raise a mere $150,000. No doubt part of investor skepticism revolved around the difficulty inherent in two-sided marketplaces and businesses that rely on indirect network effects for success. So what is the value of Airbnb’s indirect network effects and how did they scale the business? And now that Airbnb has reached a large scale, how has the traditional hotel industry responded?
Coursera: using network effects to build access to education
Coursera is leveraging network effects to expand both its user base as well as the quantity and quality of content on its platform.
thredUP utilizing network effects
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, as there is no affiliation and no switching costs both from the supply side and the demand side.
Netflix – Getting Smarter Everyday
Netflix exhibits both direct and indirect network effects through its recommendation engine, content acquisition process, and enabling devices.