network-effects

Vocabulary Word

Definition

'Network effects' refers to how a product or service gains more worth as more people use it. Think of social media platforms, the more friends you have, the better your experience.

Examples in Different Contexts

In technology, 'network effects' can lead to a product becoming more indispensable as its user base grows. A tech entrepreneur might explain, 'Our app's success is largely due to the network effects generated by our active user community.'

Practice Scenarios

Business

Scenario:

The incredible growth we've been experiencing lately is mainly due to customer referrals. We need to devise a strategy to encourage this further.

Response:

Right, let's build a program that incentivizes more referrals to maximize the network effects.

Creative

Scenario:

Our art community has been growing over the past months. The diverse range of artists is enriching our community.

Response:

Definitely, the more the people, the richer the discussions. We are benefiting from network effects significantly.