How to figure out whether a platform’s network effects are global or local when things are not as obvious as for Airbnb (clearly global) or TaskRabbit (clearly local)?
Nice to see my favorite substack active again. Two minor corrections. First, Bark has recently expanded to the US. Second, eBay Motors provides liquidity services of remote inspection and shipping via partnerships, expanding the scope of network effects. They may also have import brokers. This makes the the global vs local a choice variable, at least for some marketplaces.
Hey Professor Hagiu! So happy to see new articles. My thoughts immediately turn to WeChat, an app that almost purposely limits their network effects to China by design. I don't know much about their global strategy, but I'm quite sure they don't see purpose in expanding to other regions deliberately. However, as someone with Chinese relatives, I find myself using the app quite often, and I'm sure other expats do as well, thereby creating global network effects. Perhaps with a company like WeChat, at its level as a mature company, it may even be smarter to limit network effects to the home region and improve upon its products to tailor to that region, rather than adapting to foreign markets.
What about reputation? Presumably experiences with a platform elsewhere can be communicated to potential users everywhere, slightly increasing the likelihood of use. Attenuated to be sure, but potentially not irrelevant.
Nice to see my favorite substack active again. Two minor corrections. First, Bark has recently expanded to the US. Second, eBay Motors provides liquidity services of remote inspection and shipping via partnerships, expanding the scope of network effects. They may also have import brokers. This makes the the global vs local a choice variable, at least for some marketplaces.
Hey Professor Hagiu! So happy to see new articles. My thoughts immediately turn to WeChat, an app that almost purposely limits their network effects to China by design. I don't know much about their global strategy, but I'm quite sure they don't see purpose in expanding to other regions deliberately. However, as someone with Chinese relatives, I find myself using the app quite often, and I'm sure other expats do as well, thereby creating global network effects. Perhaps with a company like WeChat, at its level as a mature company, it may even be smarter to limit network effects to the home region and improve upon its products to tailor to that region, rather than adapting to foreign markets.
What about reputation? Presumably experiences with a platform elsewhere can be communicated to potential users everywhere, slightly increasing the likelihood of use. Attenuated to be sure, but potentially not irrelevant.