A product or service gains value as more people use it.
Vail's insight at AT&T, formalised by Rohlfs in 1974. The one-sided version is direct; the two-sided version — where buyers attract sellers and vice versa — is what platform economics is built on.
In practice
- A payment app is useless to the first user and indispensable to the millionth.
- A recruitment marketplace needs employers to attract candidates and candidates to attract employers, and the first year is spent solving that.
- Further reading
- Wikipedia
- Subject
- Networks & Collective Behavior
- Essay
- How connections shape what crowds do