
Using network effects (not patents) to build defensible software - askins4trouble
https://builtbykrit.com/blog/network-effects-defensible-product
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xg15
I don't agree with this being an "oft-overlooked" method - this seems to be
the no. 1 strategy every tech startup is trying to do these days.

Which is why I now need an account to play games or work with photoshop, why
we have "smart" light-switches that need to talk to their platform to turn on
the light half a meter away and why there are half a dozen isolated messenger
services instead of a single federated protocol (not even starting with "smart
home" systems).

However the article is a good summary of all the reasons that will cause
companies to pursue network effects and the signs you can watch out for to
spot them.

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sharemywin
I think most of these companies are missing the exponential increase in value
for users. And most seem to bundle a lot of other crap with their network
effected product which probably dilutes its value even more.

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askins4trouble
Completely agree with this!

And I think a lot of people look at network effects right now primarily as a
growth lever, but wouldn't think to use them (when they're working) as an
argument with investors that their product is defensible.

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AstralStorm
Sounds like your typical Microsoft (Embrace, Extend, Extinguish by having
majority) and Facebook approach. Neither novel nor easy to pull off.

Of course an opponent with stronger budget and marketing doing the same thing
reaaonably well will extinguish or coopt you network. Or buy you off (which
might be the desired game plan).

Users then end up paying for suddenly disappearing or closed of network.

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sharemywin
Mostly because the end network isn't large enough to attract enough capital to
get it over the critical mass.

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DrImplausible
I'm not seeing it. Fast seconds are a thing, and will come in and take your
lunch money.

I'm also not entirely sure how it connects to "defensible" software. The
ability to set a standard so that you're able to build that audience that you
need for a network effect to kick in is difficult, and is typically rare. It
might serve well in a small niche market, but you'll be unlikely to expand
past that market with out getting scooped by one of the bigger competitors.

I'm curious to learn how it's supposed to offer protection in the current
environment.

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gabriel_kent
I agree with the sentiment of this article. I think the focus should certainly
be on the network effects of offering superior value to users. Doing some
seems to do really well at creating a self-building network.

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sharemywin
The network effects could be on the business user side too. Word, javascript,
photoshop, etc. Are you trained in XYZ skill? You need to be to work in this
industry.

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oldmancoyote
This is thinking out of the box. For me it opened new perspectives. Good job!

