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by Barrin92
2365 days ago
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that's not a network effect, that is just supply. If the gas station runs out of gas you also go to another gas station, that doesn't mean there's a gas network effect. There would be a network effect if them having more cars would make it much more likely for them to get even more cars, or add value in some other way beyond the fact that they have one additional driver. That is not the case. For facebook say, it's much easier to get more users because each user themselves increases the value of the business, because the users interact. You don't care if Uber has ten thousand or ten million drivers, it does not improve the service (significantly) apart from increasing supply. |
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How does youtube have a network effect then? Using your language, youtube has a supply of viewers and a supply of creators. More videos on youtube do not beget more videos, and likewise more viewers do not beget more viewers.
In the same way that the userbase is what gives youtube value in the eyes of the creators, the passenger base gives uber value in the eyes of the drivers.