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Comment by pitnips

Well, I think you don't understand what a network effect is. From Wikipedia, "A network effect is the effect that one user of a good or service has on the value of that product to other people."

It's as simple as this: the more users Uber has, the more drivers it will have. The more drivers Uber has, the better the service and the lower the prices. Therefore, a greater number of users leads to greater value of the product (service) to other people.

"You are talking about a quality effect from the assumption that more assets will lead to a lock in effect but it's hopeful at best." I think you're totally missing here. Why is everyone talking about Uber and not Lyft or some other company? Why would anyone switch from Uber to another app if he/she is happy with Uber? Why don't you or anyone else write an app and go create a network of drivers? Because no one will switch, that's why. And that's the effect of the network.

Facebook didn't have any more assets than Google+, except for the users. How is this any different from the "quality effect" you are talking about?

parent pitnips 11 years ago

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