Over two billion people signed up for Facebook. This site the most used site for people when using the Internet. People are not watching TV so much anymore - they using Facebook, Youtube and Netflix and number of popular web sites.
Some people denote their time working for others online. What drives people to write an article on Wikipedia? They don´t get paid. Companies are enlisting people to help with innovations and sites such as Galaxy Zoo ask people to help identifying images. And why do people have to film themselves singing when they cannot sing and post the video on Youtube?
In this lecture we talk about how people are using the web to interact in new ways, and doing stuff.
22. Network Effect
Occurs when a product or service becomes more
valuable to its users as more people use it
Understanding this helps build better products and
businesses
Source: Benedict Evans slide deck
23. Network properties:
1. Whether the nodes are homogeneous or heterogeneous
2. Their type of clustering and degree of connections
3. Directionality of those connections
4. Whether they have (or are) complements
Network Properties
Networks are basically just a set of nodes connected by links
Source: Benedict Evans slide deck
24. 1. Homogeneous or heterogeneous?
Homogeneous: Composed of similar types of nodes
Skype is an example of a homogeneous network where most of
the value is derived from a single class of users, all interested in
placing a phone call
Heterogeneous: Composed of different types of nodes
OpenTable is an example of a heterogeneous network with two
distinct categories of participants: one side is restaurants, the
other side is diners
Source: Benedict Evans slide deck
Network Properties
25. 2. Degree of connections and type of clustering Source
Degree: Measures number of connections to a single node
Clustering coefficient: Measures degree to which nodes in a
graph (e.g., social graph, interest graph, intent graph, etc.)
cluster together
Type of cluster: Can range from hub-and-spoke (star) to
connected (clique). Example of Facebook friends connections
clustering (high school, college, significant other’s, etc. clusters)
Source: Benedict Evans slide deck
Network Properties
26. 3. Connections: Unidirectional or Bidirectional?
Friends
Facebook, for example,
is one place where
connections tend to be
bidirectional
Follower
Twitter, for example, is one
place where connections can
more easily be unidirectional
or one-way following, leads
to asymmetrical connections
Source: Benedict Evans slide deck
Network Properties
27. 4. Complementary Networks
Increase in usage of one product by a set of users reinforces and
increases the value of a complementary (but separate!) product,
which in turn, increases the value of the original
More usage of the MS Windows operating system, results in
more usage of the MS Office suite of applications
Source: Benedict Evans slide deck
Network Properties
28. Common law for assessing the value of communication networks
Source: Benedict Evans slide deck
Network Properties
Sarnoff’s Law
Value of the network is proportional to
the number of viewers
V = n
Broadcast: Yahoo!, Netflix
29. Common law for assessing the value of communication networks
Source: Benedict Evans slide deck
Network Properties
Metcalfe’s Law
Value of the network is proportional to
the square number of connected users
V = n2
Peer to peer: Facebook
30. Common law for assessing the value of communication networks
Source: Benedict Evans slide deck
Network Properties
Reed’s Law
Value of a group-forming network is proportional to the
and ease with which groups form within it (subgroups
grow faster than sheer number of P2P participants)
V = 2n
Gruop forming: Slack, WhatsApp groups
31. Send a package to a person in Omaha, Nebraska tell them
the name of the person in Boston, Massachusetts but don’t
give them any address
Tell them to mail the package and instruction to someone
the might know some people that might know the Boston
person
Small World Experiment
How many people were involved?
Turns out that the world is connected by six degrees…
32. Actor Kevin Bacon claimed
in an interview that he
worked with everyone in
Hollywood or someone
who worked with them
Became a popular party
game…
Six Degree of Separation
33.
34. Network is a group of interconnected people (social network)
or system of things (telephone, printers to computers)
Marketplace is network where money/transactions flow
between two or more sides with distinct (i.e. hetrogeneous)
groups of users on one side; a successful marketplace is
where supply and demand are attracted to the same place
Network Terms
35. Platform is a network of users and developers; the multi-sided
feedback loop between those users, developers, and the
platform itself creates a flywheel effectincreasing value for
each of those groups.
It can also be thought of as a network that can be
programmed, customized, and extended by outside users—
often meets needs and creates niches not defined by its
original developers at the outset
Network Terms
46. Crowd - Group of people that share a common interest. The
bigger the crowd, more innovation
Light - Clear visibility of the capabilities of the best people
Desire - Innovation is hard, need practice
Crowd Accelerated Innovation
65. Those who control the media control the culture
Social media is the first media network created by consumers
New universe of platforms, how we do business
Social Media
82. Launched September 2010
WhatsApp
Users: 1 billion
700 million photos and 100 million videos every single day
55 employees - bought by Facebook for $19 billion