Folder:
104 Business Models
File:
104.30.01 Network Effects - Is your company a network effect candidate

Is your company a network effect candidate?

Just being two-sided does not mean that you have natural network effects. You must also have a natural incentive for the participants in your platform to deal with only one mutual party. E.g., Uber/Lyft are bad network effects b/c both drivers and riders can easily switch between the two platforms and make them compete against each other.


Source:
  • https://www.nfx.com/post/the-four-types-of-defensibility/