

The Network Effect Isn't Good Enough - juliewli
http://www.nirandfar.com/2012/11/the-network-effect-isnt-good-enough.html

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jonnathanson
The trick with a network effect + stored value model is solving the "chicken
and egg" problem. You have to make sure your service is valuable to a scalable
base of users on Day 1, and that the value proposition to users doesn't depend
on there being an enormous base of users (network) _or_ a wealth of stored
value (content, data, etc.).

Often, this means starting with a niche. Ideally, a niche that is willing to
invest a lot of time and attention up front, thereby creating value for the
more casual and follow-on users. Wikipedia is a good example. The idea of
using an encyclopedia that is completely devoid of content probably wasn't
very appealing to the casual masses in the early to mid 90s. So Wikipedia
relied on a smaller mass of users who got a kick out of cataloguing, writing,
and organizing information. These users tilled the soil, so to speak, making
it more fertile for a mass userbase.

