Five Competitive Advantages: Network Effects

Five Competitive Advantages: Network Effects

December 5, 2019 by investor

A competitive advantage increases revenue by 30% over the competition or decreases cost by 30%.

Most businesses increase in value as the customer base grows and validates the product/service. Users encourage others to join the platform. This is called Network Effects.

As the number of users grow, so the value of the platform grows as well.

If a business can harness that customer base and turn it into a community that more aggressively attracts other users then it’s a competitive advantage.

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.

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