Direct Network Effects: Consider a social media platform like Facebook. The more people join Facebook, the more valuable it becomes to each user. This is because you have more friends to connect with, more photos to view, and more updates to read. This is a direct network effect.
Indirect Network Effects: Take the example of a gaming console like PlayStation. The more people purchase the console, the more game developers are interested in creating games for it. This makes the console more attractive to potential buyers as they have a wider selection of games to play. This is an indirect network effect.
Platform Network Effects: Think about a marketplace like Etsy. The more sellers there are on Etsy, the more products buyers have to choose from, which attracts more buyers. Conversely, the more buyers there are on Etsy, the more sellers are attracted to the platform because they have a larger customer base to sell to. This is a platform network effect.
Ever wondered what strategies make Apple, Amazon, and other juggernauts so successful? Better, Simpl...
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