NfX - star of last weeks newsletter - on how virality effects are not network effects and why, a guide on validating business ideas using Reddit, a extensive framework and mega article on determining your acquisition channels, two (one free, one paid) easy-to-use illustration packs and more. This is your weekly GrowthPulse.
Virality effects ≠ network effects
A quick refresher as it’s Friday morning and you’re probably still digesting your breakfast 🥐☕️.
Viral effects are about growth of new users. Viral effects are when you get your existing customers to get you more new customers, ideally for free.
Network effects are about adding value and defensibility to your product. A network effect is when every customer of your product adds incremental value to all the other customers of your product so that it becomes difficult for customers to find any alternative product which gives them as much value.
Viral effects can exist without network effects, and network effects can exist without viral effects.
Going viral doesn’t make your product stay afloat, creating a defensible business model that continues to deliver value to the users it serves is a great way of staying relevant. It is the relationship between virality and network effects that can become confusing.
Say you are building a company and you are trying to embed network effects into your product’s core. You found this great idea that could transform your business and the market. What you need is people and what you lack is also people, you just started 🤪. This is where you could leverage artificial virality to bump up users, but your product needs inherent virality in order to build a sustainable business.
Understanding the differences and similarities between virality and network effects can help you leverage them at the right time. If you’re interested in learning more about these network effects I highly recommend to start here
- Head of Analytics @ Relive (Amsterdam)
- Chief Marketing Officer @ Inner Circle (Amsterdam)
Enjoy your weekend and see you next week!
PS. If you the Reddit article is exactly what you’re currently looking for, then let me know. I actually bought it, so I can tell you more about it. ;-)