Monday, October 20, 2014

Peter Thiel on network effects

From Zero to One:
Network effects can be powerful, but you'll never reap them unless your product is valuable to its very first users when the network is necessarily small....Paradoxically, then, network effects businesses must start with especially small markets. Facebook started with just Harvard students--Mark Zuckerberg's first product was designed to get all his classmates signed up, not to attract all people of Earth. This is why successful network businesses rarely get started by MBA-types: the initial markets are so small that they often don't even appear to be business opportunities at all.