Anu Hariharan is a Partner at Y Combinator. She previously worked at Andreessen Horowitz, where she put together a study on network effects.
Anu and Craig go over the core learnings from her research, discuss examples, and share advice for entrepreneurs.
0:10– Anu’s background.
0:50– What is a network effect?
1:35– What’s the difference between a network effect and growth? What is virality?
3:45– What’s a good example of virality?
4:55– Airbnb’s word of mouth growth.
5:48– How product decisions influence growth.
6:29– Facebook’s focus on engagement for long-term growth.
8:40– What are effective tactics for growing a consumer product today?
11:38– Two ways to test for a network effect: barriers to entry for competitors and barriers to exit for users.
13:06– Are businesses with network effects winner-take-all?
13:45– What will happen with Uber and Lyft?
16:40– Will self-driving cars create a monopoly?
18:29– What other markets have weak network effects?
19:05– Will international messaging apps gain traction in the US?
20:44– Can small improvements to your product create a network effect?
23:00– Will there eventually be only one messaging app?
23:50– What should founders building a product with a network effect ask themselves?
24:20– Are you a network, a marketplace or a platform?
25:25– Questions to ask yourself if you’re building a network.
27:43– Questions to ask yourself if you’re building a marketplace.
28:35– Tips on getting over the chicken/egg problem.
31:22– Questions to ask yourself if you’re building a platform.
32:40– Find your money side and your subsidy side.
33:37– If I want to learn more about network effects, what should I do?