“A network tends to become more valuable as nodes are added to the network: this is known as the network effect. An easy example is contrasting the development of the electricity system and the telephone system. If only one house has electricity, its inhabitants have gained immense value, but if only one house has a telephone, its inhabitants have gained nothing of use. Only with additional telephones does the phone network gain value. This network effect is widespread in the modern world and creates immense value for organizations and customers alike.” – Shane Parrish
“Network effects occur when a product or service becomes more valuable as more people use it. Network effects help you build better, faster-growing and more valuable products and businesses.” – Robert Metcalfe
“The effect that one user of a good or service has on the value of that product to other people. When a network effect is present, the value of a product or service is dependent on the number of others using it.” – Gabriel Weinberg
Source:
Shane Parrish’s Farnam Street Mental Model Guide
https://www.farnamstreetblog.com/mental-models/
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Robert Metcalfe via 13 Mental Models Every Founder Should Know
https://medium.com/the-mission/13-mental-models-every-founder-should-know-c4d44afdcdd
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Gabriel Weinberg’s Mental Models I Find Repeatedly Useful
https://medium.com/@yegg/mental-models-i-find-repeatedly-useful-936f1cc405d
