Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

By the numbers: Product virality Network Effects

563,394 views

Published on

By the numbers: Product virality leads to network effects
FA C E B O O K I S T H E C L A S S I C E X A M P L E O F T H I S
Product spread from one user to another as an
organic consequence of its use, allowing Facebook
to acquire users at $0 CAC
The platform became more valuable as more users joined
The signpost of network effect in this case is high
engagement even as number of users increased
1 6 12
58
145
360
608
845
0
100
200
300
400
500
600
700
800
900
2004 2005 2006 2007 2008 2009 2010 2011
(millions,year-end)
MAUs
MAUs CAGR ‘04-’11: 162%
45% 47%
51% 54% 53% 53% 54% 55% 56% 57% 57%
0%
20%
40%
60%
80%
100%
DAUS/MAUs(%)
Engagement (DAUs/MAUs)
Product virality = Connections with friends Network effects
Source: public company data

×