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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