Anu Hariharan is a Partner at Y Combinator’s Continuity Fund. She was previously a Partner at Andreessen Horowitz.

Anu and Craig go over the core learnings from her research on network effects, discuss examples, and share advice for entrepreneurs.


0:10 – Anu’s background.

0:50 – What is a network effect?

1:35 – What’s the difference between a network effect and growth? What is virality?

3:45 – What’s a good example of virality?

4:55 – Airbnb’s word of mouth growth.

5:48 – How product decisions influence growth.

6:29 – Facebook’s focus on engagement for long-term growth.

8:40 – What are effective tactics for growing a consumer product today?

11:38 – Two ways to test for a network effect: barriers to entry for competitors and barriers to exit for users.

13:06 – Are businesses with network effects winner-take-all?

13:45 – What will happen with Uber and Lyft?

16:40 – Will self-driving cars create a monopoly?

18:29 – What other markets have weak network effects?

19:05 – Will international messaging apps gain traction in the US?

20:44 – Can small improvements to your product create a network effect?

23:00 – Will there eventually be only one messaging app?

23:50 – What should founders building a product with a network effect ask themselves?

24:20 – Are you a network, a marketplace or a platform?

25:25 – Questions to ask yourself if you’re building a network.

27:43 – Questions to ask yourself if you’re building a marketplace.

28:35 – Tips on getting over the chicken/egg problem.

31:22 – Questions to ask yourself if you’re building a platform.

32:40 – Find your money side and your subsidy side.

33:37 – If I want to learn more about network effects, what should I do?