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by austenallred
3040 days ago
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> It's clear that network effects and big bank accounts decrease innovation and competition Network effects almost by definition often create a better user experience. For example, Facebook has a network effect in that all your friends are there. The reason that’s so powerful is you actually want to join a network where your friends are. It seems like it hinders competition, but it only does so because it’s a much better user experience. Very different than, say, Standard Oil where an entire natural resource and distribution line is owned by one company to the extent that it’s literally impossible to compete, then they start screwing you because they can. |
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This thinking is backwards. You’re not there because you want to be there, you’re there simply because your friends are there and if you’re not, you’re left out. It’s not the platform that pulls, friends on the platform pull.