24. Never Stop Creating Network Effects

Classic network effects make a product more valuable as more people join, but the broader principle is any positive feedback loop that makes growth self-reinforcing. More users may generate better data, fund better content, attract more suppliers, or lower unit cost—benefits that a new entrant cannot instantly reproduce.

Draw the loops connecting customers, data, partners, inventory, content, and economics. For each new customer, ask how their arrival improves the experience or advantage for everyone else. Build several reinforcing loops rather than relying on a single feature competitors can copy.

Original sketch and model by Paras Chopra. Read the source chapter.