"network effects are about retention, monopoly, hacks, and defensibility while viral growth is about the speed of adoption;"

"network effects become more valuable as more people use it while viral growth may produce a cost-benefit through economies of scale but not necessarily making the product or service more valuable to the people subscribing to it;"

"as the network/platform grows we see more and better engagement, user rates and more customer lifetime value while viral growth there is no correlation that more use leads to more customer lifetime value;"

"as the network/platform scales, network effects produce better margins due to a reduction in customer acquisition cost with a trend leading to zero and activating pull."

"Furthermore, besides the key driver of the network effect, an important factor to consider is the growing depth and the available choice of the offering and the way the entities are connected. How they influence, contribute and reinforce the value growth with size and participation."

"As one can see from figure 1, all starts with a 2-sided network effect. Then suddenly the brand value proposition perception increases as a reinforcing mechanism (figure 2). In figure 3 we highlight how the technology becomes better thanks to increasing access to data, and finally, in figure 4 we explain how the existing demand allows Airbnb to introduce an integrative business model, experience hosting."

"Critical Mass is often described as the number of participants or size of the network needed to allow the platform itself to auto-generate its own growth — essentially by having a value perception that grows faster than the growth of the network — ."

"To give a quick example, OpenTable found out that they needed to have about 25 restaurants in any given city to be attractive enough for guests and use the booking service, while for Airbnb, the quasi-magic number was 300 homes per city."

"Commoditized or Differentiated Supply"

"Having a commoditized supply normally creates a so-called “asymptotic” curve in network effects: in a commoditized supply marketplace, the value reaches a plateau at some point even when adding more depth to the offering."

"Symmetry or Asymmetry of the Supply / Demand"

"Most of the networks have asymmetric weights of their supply and demand Asymmetry can offer a good hint in choosing what side one should attract first"

"Similarly, when Apple launched the iPhone, the company self-developed a number of key applications — knowing that there was no real economic potential for mobile app development — to later open access to developers when the number of users was substantially grown. Essentially Apple was subsidizing the supply slide."

"Normally the asymmetry of the capability of producers to serve also impacts the behavior of network effects in a way to anticipate the plateauing and, on the other hand, anticipates the achievement of the liquidity:"

"it’s easy to explain why on marketplaces asymmetric on the supply side (with the supply side able to serve a disproportionate amount of demand) shapers tend to attract supply first."

"A powerful way to attract supply-side — or in general the most important of the sides — may be that of providing them with so-called single-user-value: a value proposition that doesn’t necessarily need the network effect to exist."

"Flexibility of Location: Locally or Globally Bound"

"Quite intuitively the more a network is locally bounded, the more it will be hard to achieve liquidity — if one looks on a global scale. More precisely, the concept of liquidity in a heavily local network must probably be reimagined as a sum of different liquidity/critical mass events at a local level. The question will be that of understanding what and when the value from a (local) sub-network can spill over the larger network of networks."

"When you have a local network — especially with interconnected local networks — a particular strategy called “bowling pin” may come handy in achieving liquidity. This strategy consists of launching different cohort-networks gradually and extending to the others “like a bowling strike that gets all the pins”."

"Single Tenancy or Multi-tenancy"

"This happens more often if the offering is commoditized."

"On the other hand, sometimes artificial constraints exist to prevent such behavior. This often happens when a public, regulated service is “platformized” by institutional players."

"Transaction Frequency and Lifetime"

"Another key property of networks is the frequency of the transactions. In multi-sided systems, transaction frequency might vary — depending on what relationship we’re focusing on and to what sides of the system."

"When we look into a multi-sided network or — evermore — in market-network as James Currier once defined them, we may want to look at liquidity and critical mass as achievable separately — or relatively separately — looking at the different relationships."

"As anticipated, a heavy local network and single tenancy may slow down acquiring liquidity while asymmetry (towards supply) and high frequency (o the supply side) normally help anticipate liquidity but also contribute to asymptotically plateauing perceived value."

"Commoditized supply is also normally related to asymptotic network effects."