An experiment called Zero Search Results (aka Condensed View Experiment) was performed by Google from 2018 March 13th to 20th.
What was the EXPERIMENT?
The experiment intended to optimize the SERP for simple/direct queries like local time, unit conversions, and calculations by: 1. Giving you 1 PERFECT result using the 'Google Widget - It thus eliminates multiple search results for such simple/direct queries, theoretically, didn’t need them. 2. Clubbing all the clutter-results into 1 button "Show All Results" - Condensed view means faster load time - Faster load time means more efficiency - Zero Search Results could diminish load times by as much as half a second.
Example 1:
If you want to know the Eastern Standard Time, you'll search for 'Time Est' & get this:
Example 2:
For calculations or unit conversions you would get this:
Example 3:
If you want to know the Time/Date in London, you'll get this:
Example 4:
If you want to know current flight details, you'll get this:
What's WRONG with all this? 1.In example 1 -If in fact you're searching for some music band called Time Est, or if you meant to embark on a Timex watch online shopping spree, you’d be sorely disappointed/annoyed. To see the results that you were looking for you'll have to click on the “Show all results” button
2.In example 4 - Because only Google Widgets (consider the 'Google Flights' widget) featured the results, the travel marketplace brands like Kayak/Expedia/etc would lose serious amounts of traffic/revenue - This directly meant the 'Death of SEO'
3.In example 3 - When you make optimizations, involving words like 'Time', you dis-consider brands like 'Time Magazine' from the search results 4.In example 3 - If you're looking for a "hot date" in/around the "London area” these are totally wrong results 5. In example 3 - You’ll notice the ads in the Zero SERP. This and other examples of SERPs exclusively populated by ads were brought to Google’s attention, with many wondering about the potential implications to paid search. Why wouldn’t Google just disable ads on Zero Search Results pages? 6. In all the examples - There is an extra click needed for seeing all results 7. Do we really need that extra '1/2 Second of improvement' for these queries?
What's the Climax scene? 1. The experiment could ultimately not survive the amount of user error and vocal pushback it received 2. Google finally decided to not expand Zero Search Results outside of local time, unit conversions, and calculations 3.
Google officially announced it - Danny Sullivan; of Google; rung it's Death-bell
An Uber Self-driving Car struck & killed a woman on Sunday 18th March 2018.
Let's try to comprehend what possibly went wrong & how... What happened?
The video recorded by the forward-facing video recorder of the car shows a woman with a bike at approx 10 pm, getting hit by the car
Who is at fault?
The Police & Investigators are likely to focus on the performance of the Software involving an Autonomous Vehicle
Could a Human driver have avoided this?
Maybe NO
Should the Software have avoided this?
Absolutely YES
What were the Possible failures of the Software?
[1] The Decision Tree Algorithm failed to conclude to either apply-brakes or slow-down immediately
[2] Computer Vision (CV) technology of the HD camera couldn't detect the change in the view using Edge-Detection technique
[3] LIDAR technology; that measures the distance to the target; was used - It can't react well to quick changes of light intensity like glare, shadows, tunnels
[4] Software didn't have a Reaction-time of fractions-of-1-millisecond
[5] The software responded but the Car's Machinery failed
In 2007, an MIT graduate named Drew Houston was trying to get his startup, Dropbox, off the ground. He was trying to get Y Combinator to invest in his file storing and sharing startup.
Y Combinator is one of Silicon Valley's premiere startup incubator programs, offering early-stage companies some of their first investment funding, and access to mentors and experts.
Here's the application Houston submitted to Y Combinator's Paul Graham back then. _________________________________________________________ From Dropbox: Y Combinator Funding Application Summer 2007 Application deadline: 12 midnight (PST) April 2, 2007. Please try to answer each question in less than 120 words. We look at online demos only for the most promising applications, so don't skimp on the application because you're relying on a good demo. We don't make any formal promise about secrecy, but we don't plan to let anyone outside Y Combinator see these applications, including other startups we fund. We recommend you save regularly by clicking on the update button at the bottom of this page. Otherwise you may lose work if we restart the server. # Username:
dhouston
# Company name:
Dropbox
# Company url, if any:
http://www.getdropbox.com/
# Phone number (preferably cell):
[Redacted]
# Usernames of all founders, separated by spaces. (Please have all founders create YC accounts, or create accounts for them.)
dhouston
# Usernames of all founders who will move to (or already live in) Boston for the summer if we fund you.
dhouston
# What is your company going to make?
Dropbox synchronizes files across your/your team's computers. It's much better than uploading or email, because it's automatic, integrated into Windows, and fits into the way you already work. There's also a web interface, and the files are securely backed up to Amazon S3. Dropbox is kind of like taking the best elements of subversion, trac and rsync and making them "just work" for the average individual or team. Hackers have access to these tools, but normal people don't.
There are lots of interesting possible features. One is syncing Google Docs/Spreadsheets (or other office web apps) to local .doc and .xls files for offline access, which would be strategically important as few web apps deal with the offline problem.
# For each founder, please list: YC username; name; age; year, school, degree, and subject for each degree; email address; personal url (if any); and present employer and title (if any). Put unfinished degrees in parens. List the main contact first. Separate founders with blank lines. Put an asterisk before the name of anyone not able to move to Boston for the summer.
dhouston; Drew Houston; 24; 2006, MIT, SB computer science; houston AT alum DOT (school i went to) DOT edu; --; Bit9, Inc (went full time to part time 1/07) - project lead/software engineer
Although I'm working with other people on Dropbox, strictly speaking I'm the only founder right now. My friend [redacted], a great hacker, Stanford grad and creator of [redacted] is putting together a Mac port, but can't join as a founder right now as a former cofounder of his started an extremely similar company. My friend and roommate i from MIT is helping out too, but he works with me at Bit9, and a non-solicit clause in my employment contract prevents me from recruiting him (and the VP Eng explicitly told me not to recruit him.)
In any case, I have several leads, have been networking aggressively, and fully intend to get someone else on board -- either another good hacker or a more sales-oriented guy (e.g. the role Matt fills at Xobni). I'm aware that the odds aren't good for single founders, and would rather work with other people anyway.
# Please tell us in one or two sentences something about each founder that shows a high level of ability.
Drew - Programming since age 5; startups since age 14; 1600 on SAT; started profitable online SAT prep company in college (accoladeprep.com). For fun last summer reverse engineered the software on a number of poker sites and wrote a real-money playing poker bot (it was about break-even; see screenshot url later in the app.)
# What's new about what you're doing?
Most small teams have a few basic needs: (1) team members need their important stuff in front of them wherever they are, (2) everyone needs to be working on the latest version of a given document (and ideally can track what's changed), (3) and team data needs to be protected from disaster. There are sync tools (e.g. beinsync, Foldershare), there are backup tools (Carbonite, Mozy), and there are web uploading/publishing tools (box.net, etc.), but there's no good integrated solution.
Dropbox solves all these needs, and doesn't need configuration or babysitting. Put another way, it takes concepts that are proven winners from the dev community (version control, changelogs/trac, rsync, etc.) and puts them in a package that my little sister can figure out (she uses Dropbox to keep track of her high school term papers, and doesn't need to burn CDs or carry USB sticks anymore.)
At a higher level, online storage and local disks are big and cheap. But the internet links in between have been and will continue to be slow in comparison. In "the future", you won't have to move your data around manually. The concept that I'm most excited about is that the core technology in Dropbox -- continuous efficient sync with compression and binary diffs -- is what will get us there.
# What do you understand about your business that other companies in it just don't get?
Competing products work at the wrong layer of abstraction and/or force the user to constantly think and do things. The "online disk drive" abstraction sucks, because you can't work offline and the OS support is extremely brittle. Anything that depends on manual emailing/uploading (i.e. anything web-based) is a non-starter, because it's basically doing version control in your head. But virtually all competing services involve one or the other.
With Dropbox, you hit "Save", as you normally would, and everything just works, even with large files (thanks to binary diffs).
# What are people forced to do now because what you plan to make doesn't exist yet?
Email themselves attachments. Upload stuff to online storage sites or use online drives like Xdrive, which don't work on planes. Carry around USB drives, which can be lost, stolen, or break/get bad sectors. Waste time revising the wrong versions of given documents, resulting in Frankendocuments that contain some changes but lose others. My friend Reuben is switching his financial consulting company from a PHP-based CMS to a beta of Dropbox because all they used it for was file sharing. Techies often hack together brittle solutions involving web hosting, rsync, and cron jobs, or entertaining abominations such as those listed in this slashdot article ("Small Office Windows Backup Software" - http://ask.slashdot.org/article.pl?sid=07/01/04/0336246).
# How will you make money?
The current plan is a freemium approach, where we give away free 1GB accounts and charge for additional storage (maybe ~$5/mo or less for 10GB for individuals and team plans that start at maybe $20/mo.). It's hard to get consumers to pay for things, but fortunately small/medium businesses already pay for solutions that are subsets of what Dropbox does and are harder to use. There will be tiered pricing for business accounts (upper tiers will retain more older versions of documents, have branded extranets for secure file sharing with clients/partners, etc., and an 'enterprise' plan that features, well, a really high price.)
I've already been approached by potential partners/customers asking for an API to programmatically create Dropboxes (e.g. to handle file sharing for Assembla.com, a web site for managing global dev teams). There's a natural synergy between Basecamp-like project mgmt/groupware web apps (for the to-do lists, calendaring, etc.) and Dropbox for file sharing. I've also had requests for an enterprise version that would sit on a company's network (as opposed to my S3 store) for which I could probably charge a lot.
# Who are your competitors, and who might become competitors? Who do you fear most?
Carbonite and Mozy do a good job with hassle-free backup, and a move into sync would make sense. Sharpcast (venture funded) announced a similar app called Hummingbird, but according to [redacted] they're taking an extraordinarily difficult approach involving NT kernel drivers. Google's coming out with GDrive at some point. Microsoft's Groove does sync and is part of Office 2007, but is very heavyweight and doesn't include any of the web stuff or backup. There are apps like Omnidrive and Titanize but the implementations are buggy or have bad UIs.
# For founders who are hackers: what cool things have you built? (Include urls if possible.)
Accolade Online SAT prep (launched in 2004) (http://www.accoladeprep.com/); a poker bot (here's an old screenshot: https://www.accoladeprep.com/sshot2.gif; it's using play money there but worked with real money too.)
# How long have the founders known one another and how did you meet?
There's a joke in here somewhere.
# What tools will you use to build your product?
Python (top to bottom.) sqlite (client), mysql (server). Turbogears (at least until it won't scale.) Amazon EC2 and S3 for serving file data.
# If you've already started working on it, how long have you been working and how many lines of code (if applicable) have you written?
3 months part time. About ~5KLOC client and ~2KLOC server of python, C++, Cheetah templates, installer scripts, etc.
# If you have an online demo, what's the url?
Here's a screencast that I'll also put up on news.yc:
http://www.getdropbox.com/u/2/screencast%20-%20Copy.html
If you do have a Windows box or two, here's the latest build:
http://www.getdropbox.com/u/2/DropboxInstaller.exe
# How long will it take before you have a prototype? A beta? A version you can charge for?
Prototype - done in Feb. Version I can charge for: 8 weeks maybe? (ed: hahaha)
# Which companies would be most likely to buy you?
Google/MS/Yahoo are all acutely interested in this general space. Google announced GDrive/"Platypus" a long time ago but the release date is uncertain (a friend at Google says the first implementation was this ghetto VBScript/Java thing for internal use only). MS announced Live Drive and bought Foldershare in '05 which does a subset of what Dropbox does. Iron Mountain, Carbonite or Mozy or anyone else dealing with backup for SMBs could also be interested, as none of them have touched the sync problem to date.
In some ways, Dropbox is for arbitrary files what Basecamp is for lightweight project management, and the two would plug together really well (although 37signals doesn't seem like the buying-companies type).
At the end of the day, though, it's an extremely capital-efficient business. We know people are willing to pay for this and just want to put together something that rocks and get it in front of as many people as possible.
# If one wanted to buy you three months in (August 2007), what's the lowest offer you'd take?
I'd rather see the idea through, but I'd probably have a hard time turning down $1m after taxes for 6 months of work.
# Why would your project be hard for someone else to duplicate?
This idea requires executing well in several somewhat orthogonal directions, and missteps in any torpedo the entire product.
For example, there's an academic/theoretical component: designing the protocol and app to behave consistently/recoverably when any power or ethernet cord in the chain could pop out at any time. There's a gross Win32 integration piece (ditto for a Mac port). There's a mostly Linux/Unix-oriented operations/sysadmin and scalability piece. Then there's the web design and UX piece to make things simple and sexy. Most of these hats are pretty different, and if executing in all these directions was easy, a good product/service would already exist.
# Do you have any ideas you consider patentable?
[Redacted]
# What might go wrong? (This is a test of imagination, not confidence.)
Google might finally unleash GDrive and steal a lot of Dropbox's thunder (especially if this takes place before launch.) In general, the online storage space is extremely noisy, so being marginally better isn't good enough; there has to be a leap in value worthy of writing/blogging/telling friends about. I'll need to bring on cofounder(s) and build a team, which takes time. Other competitors are much better funded; we might need to raise working capital to accelerate growth. There will be the usual growing pains scaling and finding bottlenecks (although I've provisioned load balanced, high availability web apps before.) Acquiring small business customers might be more expensive/take longer than hoped. Prioritizing features and choosing the right market segments to tackle will be hard. Getting love from early adopters will be important, but getting distracted by/releasing late due to frivolous feature requests could be fatal.
# If you're already incorporated, when were you? Who are the shareholders and what percent does each own? If you've had funding, how much, at what valuation(s)?
Not incorporated
# If you're not incorporated yet, please list the percent of the company you plan to give each founder, and anyone else you plan to give stock to. (This question is as much for you as us.)
Drew
# If you'll have any major expenses beyond the living costs of your founders, bandwidth, and servers, what will they be?
None; maybe AdWords.
# If by August your startup seems to have a significant (say 20%) chance of making you rich, which of the founders would commit to working on it full-time for the next several years?
Drew
# Do any founders have other commitments between June and August 2007 inclusive?
No; I've given notice at Bit9 to work on this full time regardless of YC funding.
# Do any founders have commitments in the future (e.g. have been accepted to grad school), and if so what?
No. Probably moving to SF in September
# Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? Will any be working as employees or consultants for anyone else?
Drew: Some work was done at the Bit9 office; I consulted an attorney and have a signed letter indicating Bit9 has no stake/ownership of any kind in Dropbox
# Was any of your code written by someone who is not one of your founders? If so, how can you safely use it? (Open source is ok of course.)
No
# If you had any other ideas you considered applying with, feel free to list them. One may be something we've been waiting for.
One click screen sharing (already done pretty well by Glance); a wiki with version-controlled drawing canvases that let you draw diagrams or mock up UIs (Thinkature is kind of related, but this is more text with canvases interspersed than a shared whiteboard) to help teams get on the same page and spec things out better (we use Visio and Powerpoint at Bit9, which sucks)
# Please tell us something surprising or amusing that one of you has discovered. (The answer need not be related to your project.)
The ridiculous things people name their documents to do versioning, like "proposal v2 good revised NEW 11-15-06.doc", continue to crack me up. _________________________________________________________
Dropbox co-founders Drew Houston and Arash Ferdowsi celebrated the event of Dropbox'sIPO at the NASDAQ in New York City on 2018 March 23rd. Dropbox is finally public & worth $20B
A BOT is an AI software that is capable of doing things without human intervention.
What is a Chatbot & what does it do?
A Chatbot (also called as: Talkbot, Chatterbot, Bot, IM bot, Interactive agent, Artificial Conversational Entity) is a BOT which can converse (via auditory/textual methods) with Humans in their language (eg. English or Sanskrit or German).
How do we measure the performance of a Chatbot?
If a chatbot can fool you into making you believe that it is a human, we can call it a success. This criteria comes from the concept of Turing test which has been named after the British mathematician and computer pioneer Alan Turingwho proposed the same in a 1950 paper titled Computing Machinery and Intelligence.
How does it do it?
Simply put: It usually just scans the written query, then pull a reply with the most matching keywords or the most similar wording pattern from a database to answer the query - An advanced chatbot would use NLP (Natural Language Processing).
A Chatbot can either be Rule-based or AI/ML-based.
A Rule-based bot answers questions based on predefined rules/logic & data. Problem is that such bots usually fail in answering questions whose pattern does not match with the rules.
An AI-based bot learns from the interactions it has with the end users. Behind this learnings there are analytics platforms, and integrations with APIs, among other things, that feed the AI and provide resources so that that the chatbot is able to provide the user with correct answers.
What can Chatbots actually do?
Some of the most come use-cases for Chatbots:
a) Virtual Assistants:
Used to answer simple questions, help users book services, get more information about a specific topic, buy a product, etc. - all of this available 24*7.
b) Idea Generation
c) Automation of manual processes
d) Analysis of unstructured data & making predictions using the same
Some popular example of Chatbots that have outgrown into Virtual Assistants: [1] Siri by Apple
Siri is a voice-driven assistant that talks back to you and proactively recommends actions to take.
[2] Jarvis by Mark Zuckerberg
Jarvis is a home assistant and has been programmed to control household items like the Zuckerber's toaster or house lights.
[3] Alexa by Amazon
Alexa is an AI-based voice recognition system, which allows you to ask it questions or execute certain functions through commands, in order to get a “smart home”. It operates with devices such as lights, watches, thermostats, etc.
a recent movie based on the life & challenging times of the great Alan Turing
Transactions and the records of them are among the defining fabrics in our economic, legal, & political ecosystems - And hence it has always been utmost important to protect their integrity. The intermediaries like lawyers, brokers, bankers have been; since centuries; acting as watchmen of this integrity so that we; as individuals, organizations, machines, or algorithms; could transact/interact with one another without worrying about the maintenance of legitimacy of the data.
One of the most common problems or attacks that any currency system; digital or physical; faces is 'Double Spending' in which the same currency is duplicated/falsified and is spent more than once.
'Watchmen' movie
Came 2008 and Satoshi Nakamoto invented Blockchain for use in the Cryptocurrency Bitcoin as its public transaction ledger. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem without the need of a trusted authority or central server.
So, what is Blockchain?
氣 Blockchain; originally called Block Chain; is a continuously growing list of records, called Blocks, which are linked and secured using cryptography. Each block typically contains a Cryptographic Hash of the previous block, a Timestamp, and the Transaction data.
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Blockchain is a Decentralized database.
To understand the difference between centralized vs decentralized DB, imagine you have two pearls and you want to give one pearl to your friend 'Chi'. In a centralized world, you would have to ask permission from Chi's friend 'Aum'. First Aum will have to vet if you have the pearl or not and if you do, Aum will give you permission to give it to Chi. Aum is same as a bank. But with a decentralized system, you do not have to ask permission from Aum - Instead, the Blockchain will confirm if you have the pearl or not and will proceed with the handover.
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Blockchainassassinates the need of trusting humans/organizations and establishes algorithms (mathematics & computing) as your new trusted-partners (who are highly unlikely prone to errors, malfunctions, & tempering).
With blockchain, we can imagine a world in which data is embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, revision - which ensures that every digital record and signature can be identified, validated, stored, shared.
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Blockchain is a Distributed Database.
Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.
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Blockchain is a Peer-to-Peer Transmission which means that Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.
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Blockchain supports Transparency with Pseudonymity
Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a Blockchain has a unique 30+ character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.
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Blockchain ensures Irreversibility of Records - Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Blockchain ensures that the recording on the database is permanent, chronologically ordered, and available to all others on the network.
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The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.
3. 50%+ of new start-ups were in B2B segment with Fintech & Healthtech leading the pack
4. IoT, AR (augmented reality), Blockchain emerged as new sectors followed by Robotics & 3D Printing (withLogistics, Agri tech, SaaS sectors emerging in Tier II & III cities)
5. Bengaluru, NCR, Mumbai were major hubs
6. Tier II & III cities accounted for 20% of start-ups
7. 18% YoY growth in Social start-ups
8. Total amount of funding increased
9. Funding surged from 27% to 32% in B2B sector
10. Unicorns' funding rose to $6.4B
11. 53% dip in Seed-stage funding
12. Funding for start-ups that were founded in the last 5 years slipped from $2B to $1.8B
13. 30% increase in Accelerators
14. Non-US investors started to foray into India
15. Number of mergers/acquisitions rose, with many non-tech Indian companies acquiring start-ups
16. Indian government’s (NaMo's) continued its constant push towards creating a conducive startup environment via initiatives like 'Startup India', 'Standup India', 'Digital India'. Government also eased policies around running-businesses - better taxation policies implemented, easier methods to start up, greater access to loans, scaled-up support to establishing incubation centers. Government floated 50+ sector-specific & sector-agnostic schemes including Single Point Registration Scheme (SPRS), Bank Credit Facilitation Scheme, Pradhan Mantri Mudra Yojana (PMMY), etc. It also amended the new General Financial Rules, where it will give priority to products from Indian startups in official procurement.
17. 72% founders were less than 35 years old
18. Demonetization & GST fueled FinTech's growth
19. India ranked: 3rd largest start-up market, only after USA & UK 60th in Global Innovation index 2nd in Global Fintech-adoption index 5th in solving social issues with innovation 3rd in number of Startup Incubators/Accelerators, after China & USA
Some of the most powerful and fastest-growing companies are based upon Network Effects.
What are Network Effects?
A product displays +ve network effects when more usage of the product by any user increases the product’s value for some/all of other users.
What are its types?
[1] Direct Network Effects
Increase in usage lead to a direct increase in value.
Example:
Telephone service
[2] Indirect Network Effects
Increase in usage of the product spawns the production of increasingly valuable complementary goods, and this results in an increase in the value of the original product.
Example:
While there are some direct network effects associated with Windows, the indirect network effects that arise from the increased quality and availability of complementary applications software are probably much more important. [3] Two-sided Network Effects
Increase in usage by one set of users increases the value of a complementary product to another distinct set of users, and vice versa.
Example:
Marketplaces such as Airbnb, Uber, and Zaarly. More riders does not necessarily improve my Uber experience but it does attract more drivers, which will improve Uber for me.
[4] Local Network Effects
The microstructure of an underlying network of connections often influences how much network effects matter. For example, a product displays local network effects when each user is influenced directly by the decisions of only a small subset of other users — those they are “connected” to via an underlying social or business network.
Example:
Zaarly - A new Homeowner who joins in Denver contributes to the Denver Network Effect, and does not influence the quality of the experience for Homeowners in Austin. Instant messaging is another great example of a product that displays ‘local’ network effects which are social rather than geographical.
What Network Effects are Not?
[a] Network Effects are Not Virality
A viral product is one whose rate of adoption increases with each additional user - The more people join, the faster it grows - until a certain point.
Examples: [a.1] Products that exhibit virality without exhibiting network effects:
Email and cross-platform communication products.
A key feature here is that they are either interoperable across networks (Hotmail) or leverage an underlying network for both the viral transmission as well as delivery of the value proposition. In the case of SurveyMonkey, EventBrite etc., that underlying network may be mail, a social network or even a blog. [a.2] Products that exhibit network effects without exhibiting virality:
Products with indirect network effects such as marketplaces may not grow virally. In such cases, network effects are a result of aggregation of the two sides and while each side can be brought on virally through some incentive, it’s very difficult to leverage the indirect network effect to get users on one side to come on through invitations or interactions from the other side.
Here’s an image showing some examples:
[b] Network Effects are Not Economies of Scale
Economies of Scale arise when there’s sufficient volume of production to massively reduce the costs, so the largest player can maintain the best margin of profitability. Network Effects are distinct from Economies of scale because they produce greater value for the marginal increase in cost. As Networks grow larger, the cost increases, but the value of the product increases faster.
Example:
The fact that Apple sells a lot of iPhones does not mean that it has Network Effects, just Economies of Scale. The fact that people want to buy it so that they can use iMessage with their friends - that’s the Network Effect.
Why Network Effects are Powerful & why do they create so much value?
[Reason 1] Above visual shows that:
Network Effects' value increases Exponentially - Costs increase Linearly. The cost of maintaining the network does not grow as fast as the value of the network. The value increases as the size of the network increases.
[Reason 2] Network Effects don’t require a ton of maintenance. Once they’re built, they tend to perpetuate themselves - Even if they’re managed completely incompetently.
Example:
Here’s what James Currier learned from his time working at Monster.com: In every element of the business other than the sales team, this was a poorly run company. I don’t think they had changed the website in two years. Poor product, poor customer service, poor strategic decision making, and from what we could tell, a lack of insight into what was about to happen to them because of LinkedIn and others. What stood out was that none of this mismanagement mattered. They had a network effect in place. Like Craigslist, the only feature that mattered was that everyone was there. The buyers found efficiencies in using them and so did the sellers. Both sides of the marketplace kept coming, and Monster kept making money.
Not all businesses can create Network Effects, and not all businesses should. But how to create Network Effects?
[a] Come for the Tool, stay for the Network
Point is: You can’t attract your first user with a network effect (because there is no network, and therefore no value.) So, in many cases, strategic openings to create Network Effects only become available after certain levels of success with simpler products. The idea is to initially attract users with a single-player tool and then, over time, get them to participate in a network. The tool helps get to initial critical mass. The network creates the long term value for users, and defensibility for the company.
Example:
Instagram’s initial hook was the cool photo filters. At the time some other apps like Hipstamatic had filters but you had to pay for them. Instagram also made it easy to share your photos on other networks like Facebook and Twitter. But you could also share on Instagram’s network, which of course became the preferred way to use Instagram over time.
[b] Dominating Minuscule (Extremely Tiny) Markets
This concept was labeled “Minimum Viable Critical Mass” by Sean Ellis. In this case, you can attract your first user with a network effect.
Example:
We saw this as Facebook got started at Harvard. They had to start with a tight social group, like a class or group of friends - and grow quickly within a small and well-defined group, until they had a meaningful network to that demographic.
[c] Fake it till you make it
If your product relies on Network Effects, you may have to create the illusion of a network for early users. Do what it takes to test your concept and get validation and early traction.
[d] Content Networks vs. Connection Networks
There are two ways to solve the problem of creating a Network - connection and content. Traditionally, startups have solved this problem by racing to connect users with each other, essentially providing them the pipes to interact with each other. Twitter, Facebook and LinkedIn have grown big with this connection-first model. However, a new breed of networks is gaining ground with the content-first model. They provide users with tools to create a corpus of content, and then enable conversations around that content. Content platforms create Network Effects not through interaction, but through hosting videos, posts, etc. This lets them reach the point where they’re providing more value to new users much more quickly than the connection model, which relies on existing users in a social circle. The secret to creating a social product that demonstrates immediate value is to enable content before creating the network. Content created on the network is the new source of competitive advantage. The videos on YouTube, the pictures on Instagram, the answers on Quora are the primary source of value for users and the key driver of competitive advantage for these platforms. This stored value has a long tail, and will be an asset to the platform for potentially years to come.
Example:
Behance, Pinterest, Instagram, Dribble, Scoop.It have all gained traction by building a corpus of content before building a social network.
