We often have founders telling us that their business has network effects, but few have quantitative ways to demonstrate that. Here's a few metrics I often use when assessing startups' network effects:
- cohort curves: is activity increasing as the network grows?
- match rate
(often also called success or utilization rate)
- power user curves to see how engagement is evolving over time! See our post: https://a16z.com/2018/08/06/power-user-curve-l30-l7/ …
And check out our other discussions on network effects:
What even IS a network effect? Debunking Metcalfe's Law and debating whether brand is a type of network effect (I think yes!): https://www.youtube.com/watch?v=nD_fz1ly-kA …
Rapid fire round - which companies/categories have stronger or weaker network effects? Food delivery, social networking, etc. https://youtu.be/3BO050o2XfY
And ask us anything about network effects and we'll do our best to answer!
You can follow @ljin18.
Tip: mention @threader_app on a Twitter thread with the keyword “compile” to get a link to it.
Enjoy Threader? Sign up.
Threader is an independent project created by only two developers. The site gets 500,000+ visits a month and our iOS Twitter client was featured as an App of the Day by Apple. Running this space is expensive and time consuming. If you find Threader useful, please consider supporting us to make it a sustainable project.