We often look at the regulators and ask ‘why isn’t innovation spreading faster’. The blame falls to Government, or the NHS, or authorities. But our blaming does little to change the status quo.
And we let innovators of the hook.
I think that when we point the finger, it should be at innovators: Why, as innovators, are you not designing solutions that spread?
Network effects dominate the consumer word. The networks are often socially driven. From diary management (Calendly) to social networking (Facebook) to holidaying (Airbnb), companies win each category with network effects.
Andreessen Horowitz’s essay
tells us why:
Any product that has a social component baked in has fundamental and asymmetric advantages over competing non-social products in that category: better growth loops, better engagement, better retention, better defensibility. And because social+ companies are network and community-driven, that advantage accumulates over time.
For clarity, a network effect is
the phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. Network effects are typically positive, resulting in a given user deriving more value from a product as other users join the same network.
Therefore, network effects are good for the care provider and good for the user.
In care, they exist already in the world of atoms rather than bits. Medequip has a network of distribution hubs; each new customer required new hubs, and each new hub benefits the network.
At first glance, there are valid reasons why innovators havn’t leveraged network effects.
Our market’s focus is on features rather than distribution: in care, a glitch can result in loss of life, not just revenue loss. The platforms that exist deal exclusively with sensitive patient (health) information, too. Information governance (rightly) halts the liberal sharing of such information.
But, there’s an opportunity to use network effects to spread innovation.