BU415 Chapter Notes - Chapter 4: 3Com, Network Effect, Itunes
Document Summary
Value in scarcity - the value of a good is a function of its limited ability (diamond) Value in plentitude - the value of a network is a function of the number of physically or virtually connected nodes (instagram) Connections between network nodes are intangible and invisible - typically people rather than devices. **size matters:** whether physical or virtual, the value of the network for its members is a function of its size - the more nodes, the more valuable it is for the members. Metcalfe"s law: the value of a network increases exponentially with the number of users. He developed ethernet, 3com: sold ethernet cards for 1k each. The self-reinforcing mechanism by which the strong gets stronger and the weaker gets weaker. An example is in economies of scale how the stronger organization (due to eos) gets stronger and the weaker organization gets weaker.
