I’ve written three posts on this subject, though the term I used was “virality” vs. “network effect”. The latter term is perhaps better.
What’s really interesting in the article by Alexei Oreskovic The founder of real estate website Trulia has a new twist on startup investing – and it involves building his own products is not so much the fact that they are hiring their own engineers, it’s what those engineers will be doing.
Flint, and the other cofounders of venture capital firm NFX, are on the hunt for “network effects” – products that increase in value as more people use it. That’s what propelled Microsoft’s Windows operating system to become the dominant computing platform , years before the internet was a factor. And more recently, it’s the secret to the success of giants like Facebook, Airbnb and Uber among others.