We often have founders telling us that their business has network effects, but few have quantitative ways to demonstrate that. Here's a few metrics I often use when assessing startups' network effects:
- cohort curves: is activity increasing as the network grows?
- match rate
- cohort curves: is activity increasing as the network grows?
- match rate
(often also called success or utilization rate)
- power user curves to see how engagement is evolving over time! See our post: a16z.com/2018/08/06/pow…
- power user curves to see how engagement is evolving over time! See our post: a16z.com/2018/08/06/pow…
Watch our hallway discussion on metrics to measure network effects here with @dcoolican and @withfries2:
#a16zconvos
#a16zconvos
And check out our other discussions on network effects:
What even IS a network effect? Debunking Metcalfe's Law and debating whether brand is a type of network effect (I think yes!):
What even IS a network effect? Debunking Metcalfe's Law and debating whether brand is a type of network effect (I think yes!):
Rapid fire round - which companies/categories have stronger or weaker network effects? Food delivery, social networking, etc.
And ask us anything about network effects and we'll do our best to answer!
