I learnt this framework from Eva Lau at Wattpad in regards to building out a product with network effects.
Why?
The tech world is winner take all. Win the whole market.
What?
Framework to produce a product with viral network effects. Create a product that becomes more valuable the more people use it regularly.
Atomic unit
Seed the supply
Scale the demand
Enlarge the Network coefficient
Tracking
Smallest product unit that your network revolves around.
Uber: ride
Amazon: product
Wattpad: Story
Spotify: Playlist?
The atomic unit of a company can transform over over. Facebook is a great example:
Beginning: Facebook profile
Middle: the post and the subsequent feed.
Now: Facebook is a data network. It is no longer a social network.
How you get users to buy into the atomic unit.
B2B: Getting paid to seed supply is the most cost effective way.
Make onboarding the supply side very easy.
YouTube: they didn't focus too much on supply requirements (video or content quality).
How do you know you have enough supply?
Hint: Suppliers begin asking for features that don't add value to atomic unit.
How you get users to consume the atomic unit.
20% of user create your atomic demand
80% of users are consuming
increase engagement
(# of connections) x (# of users) x (# of engagement) = network coefficient
Engagement: Features have to add value to atomic unit, tracked via engagement numbers
Proprietary data to seed different business models