Network Effects
When a product becomes more valuable as more people use it.
Network effects create powerful moats: each new user increases value for existing users (e.g. marketplaces, social platforms, communication tools). They drive winner-takes-most dynamics and are highly prized by investors for defensibility and scalability.
Examples
A marketplace gets better as more buyers and sellers join. — A messaging app’s value rises with each new contact.
How it relates to The Startup Foundry
Network effects strengthen your moat and Scalability — qualities the Investability Report rewards.