The utility of large networks scales exponentially with size, especially for social networks.
Reed's 1999 claim of two-to-the-n growth from subgroup formation. It is the most optimistic of the network-value laws and the least defended — Odlyzko's n log n is the better-supported estimate.
In practice
- A platform argues that its value grows with the number of groups its users could form, and prices its funding round on that arithmetic.
- The groups people actually maintain number a dozen or so however large the platform becomes, and the valuation rested on the ones nobody formed.
- Further reading
- Wikipedia
- Subject
- Networks & Collective Behavior
- Essay
- How connections shape what crowds do