Network Effect

A network effect refers to a situation where the value of a product, platform, or service increases as more people use it. In community building, a network effect refers to the phenomenon where the value of a community increases as more people join.

For instance, if you build an online community, this phenomenon occurs with the addition of every new member. As each new person joins your community, they bring additional value to you, your brand, the community, and its members. Those members then encourage others to join, which adds even more value to the community. This creates a cycle where additional users create additional value, which in turn attracts other users who add even more value. Network effects are usually positive and derive from a potential customer deriving more value from your product or service because of how many other people they see using it.