The Social Network and The Network Effect
In this video clip from the movie, The Social Network, Mark Zuckerberg explains that in order to break into the market at Baylor University in Texas, they first broke into surrounding markets at universities in close proximity. Once college students at campuses surrounding Baylor were all using the same network, then students at Baylor were more inclined to join. With each one of their friends and colleagues who joined the network, it added more value for new users to join as well.
Watch from 2:58-3:30
- How does the network effect allow companies to break into new markets?
- What are some examples of differents products and services that are considered network goods?