Now that it’s lost its novelty, the likely reason you’re on Facebook is simple: because everybody else is.
A network effect occurs when the value of something is dependent on others using it. A telephone only works if there’s another telephone (or many) for you to call. A social network or a community only works if others join in, too.
Worth considering, though, is the opposite idea – that something only works when it’s limited to a small number of people.
It’s the VIP list. It’s the Margiela jacket. It’s why the fanboy is dismayed when his favourite unknown band signs to a major label.
All these are examples of the exclusivity effect.
It’s easy enough to create an exclusivity effect. Hike up the price, limit the access – as long as what you’re making is worth it (and hopefully it will be) then you’ll get where you need to go.
Look at Hiut. On old sewing machines, in a small town in West Wales, they make jeans. Right now, they’re so busy that they’ve stopped taking orders.
Rather than try to sell to the masses, Hiut aimed for the exclusivity effect. Speak to the passionate few, let the word spread organically. It wouldn’t work for Levi’s, and that’s kinda the point.
Yes, you can build a business that relies on the network effect of thousands – or millions – of customers. But, in a world where attention is scarcer than ever, it’s really, really hard to make that many people listen to what you have to say.
What if, instead, your business runs best when you have just a few hundred customers?
How would that change the work you do?