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The Network Effect

Let’s imagine for a moment that it’s 1980 and you have a product that’s revolutionary and two things are certain here –

  1. You are definitely going to receive widespread news coverage, and

  2. People are going to be excited about it.

Given this, how long do you think it’s going to take for 50 million people to start using your product?

Even if your product is groundbreaking, it’s going to take more than a decade to gain widespread traction. Telephones took 3 years to be in the homes of 50,000 people and it took mobile phones approximately 12 years to reach 50 million users!

So, how is it possible today, to get millions of people in record time to use your product? That’s where the internet comes into play. People are connected in ways that you and I have been grossly underestimating.


Products or services in the digital space can make use of the “Network Effect” to gain users at an unprecedented rate. Simply put, the Network Effect is “a phenomenon whereby increased numbers of people or participants improve the value of a good or service.” For example, earlier, the internet was not used extensively other than by the scientific community and the military. However, as people started ‘coming online’ to create content, more people started using the internet as it offered them a value which was previously absent. As the internet traffic increased, it offered more and more value, leading to the Network Effect. Let’s break it down even simpler. Think of YouTube or TikTok. Early users created content for a set of people who in turn downloaded the app to create more content and that got more people to use the app, reaching millions of people in a short period of time.

Therefore, to reach people at an unprecedented scale within an unbelievably short period of time, you need not only a revolutionary product but also people coming together to use the product to create value to others, who in turn will do the same for the next set of people and so on.

What do you think? Like we always say, “Involve yourself to be inspired to innovate”. It’s that SIMPLE!

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