Anu Hariharan on Network Effects
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?