“One is the loneliest number that you'll ever do. Two can be as bad as one, it's the loneliest number since the number one.”
These wise words from Three Dog Night aren’t only relevant during sad, lonely scenes on the big screen, but they also make a lot of sense when considering network-based platforms. This is the best definition that I could find to describe the phenomenon called the Network Effect:
A product displays positive network effects when more usage of the product by any user increases the product's value for other users (and sometimes all users).
When more people (not one, not even two, but many people) connect to the platform, the more valuable the platform network becomes. However, adding more warm bodies to the network isn’t enough when interaction is stagnant or non-existing. Engaging is essential to keep participants coming back to the platform; without engagement, the system is not sufficient to achieve network effects.
The most important product of the network is the networker:
In the Construction world, the speed at which materials can be delivered is a major component to completing a job. Platform-based businesses can gain power through the network effect of bringing more trading partners together.
Collaborative tools possess the ability to help supply chains quickly react to demand and provide visibility from end-to-end across the supply chain, helping managers to deter risks from missed deliveries and speeding fulfillment. Scalable, on-demand services that can be accessed anywhere allow participants to be plugged in at all times, and have the ability to mine and share data for deeper insights and personalization.
You’re never alone with a platform that leverages the network effect. Stay tuned to learn about Command Alkon’s platform, CONNEX.