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3 Product-Market Fit

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Patrick Ng

Why Network Effects Matter Less Than They Used To


Network Effects Matter Less Than They Used To. That’s a Really Big Deal.
hbr.org
Network Effects Matter Less Than They Used To. That’s a Really Big Deal.
In the software age, switching costs are lower.

For a long time we emphasized “network effects” as a potential secret sauce for business models. Economists use “network effects” to describe contexts where a good or service offers increasing benefits the more users it has.

However, market power from Network effect diminishes with low switching cost, thus first mover advantage diminishes

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