Network Effects
1.
Calculator will be very valuable because it is going to improve me productivity in certain tasks giving me an
advantage over those who don’t have one.
2.
Telephone is not valuable at all if I am the only one with it, since it needs at least two people to be of any use.
Now if the telephone is a smart phone, then there might be value there because of other features present on
the smart phones.
3.
If I shop at Amazon
a.
I don’t really directly care how many people use Amazon.
b.
Yes I directly care how many merchants are on Amazon for two reasons: first it provides me a variety of
products I can buy and second, the competition will lower prices for me.
c.
Indirectly, more people on Amazon attract more merchants. More people also allow Amazon economies of
scale in its operations. This allow lower costs for me. Also more people would mean more reviews for
products giving me an opportunity to understand how good/bad a product is without actually spending
any money on it.
4.
Apple, Google, Facebook, Wells Fargo, Exxon.
LinkedIn Case
1.
LinkedIn to some extent compartmentalizes personal information from professional information. Network
