Information Rules · Carl Shapiro & Hal Varian

The network effect examples

Curated by · reviewed 2026-06-01

The network effect is when a product becomes more valuable to each user as more people use it — so the leader becomes very hard to dislodge. Examples:

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5 examples of the network effect

  1. The telephone

    One phone is useless; the millionth makes every other phone more valuable. The value comes from who else is on it.

  2. Messaging apps

    You join the app your friends are already on — which is why one app tends to win a whole region.

  3. Marketplaces

    On eBay, Uber, or Airbnb, more buyers attract more sellers, which attract more buyers — a flywheel rivals struggle to break into.

  4. Social networks

    A platform is only worth being on if your people are on it, so the biggest one keeps getting bigger.

  5. App stores

    Developers build for the platform with the most users; users pick the platform with the most apps. Each side pulls the other.

How to spot it in yourself

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