A true network effect requires incremental value for existing users
Anu Hariharan · 20VC: Why, How and When To Think About Growth Teams, The Right Way To Think About Network Effects & Scaling from Phase 1 To Phase 2 of Startup Life with Anu Hariharan, Partner @ YC Continuity Fund · Mar 5, 2018 · at 7:32
Anu Hariharan, Partner at YC Continuity Fund, defines the core mechanics of network effects and explains why founders often misidentify technical platforms or system nodes as having network effects.
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“I think the common confusion arises from the fact that people get confused with systems, nodes, technology, platforms, you know, and I think they forget that it is about measuring the incremental value to the existing user. As more users join it, and if that doesn't exist, then there is no network effect.”
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