Reverse Network Effects - What Big Networks Die From
For the success of any social network network effect is vital, which is that the value of the network increases with the number of participants. According to the empirical law of Metcalf , the usefulness of the network is approximately half the square of the number of participants. However, the network effect is not a guarantee of the cloudless existence of a large network. Metcalf's law did not prevent Facebook from going around Friendster and MySpace.
Sangit Paul Chaudry - an entrepreneur, analyst and business consultant from Singapore - believes that the cause of death of many large networks are the so-called reverse network effects , due to which the value of the network does not increase, but decreases with increasing number of users. How do they work?
The usefulness of any network comes from three sources - connections, content and influence (connection, content, clout):
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Naturally, real networks to some extent rely on all three sources, and the most successful of them fully exploit each.
However, as the size of the network grows, all three aspects may degrade - these are reverse network effects.
The flow of new users can actually worsen the quality of communication between network members - this can happen when a closed and obscure community suddenly becomes more open and popular. The flow of contact requests from unfamiliar people, spam and vandalism make communication online difficult. The signal sinks in noise. To avoid this, it is necessary to create "friction", which prevents the uncontrolled growth of the number of participants. Without such "friction" the network can show explosive growth, but a recession will follow very quickly.
A characteristic example is the anonymous ChatRoulette video chat, which first attracted a large audience, but the anonymity and the absence of the need to register resulted in psychos and exhibitionists flooding him, after which normal people fled from there.
One of the reasons for the success of Facebook was precisely that at an early stage of its development, it was able to avoid this effect. Initially, only students at Harvard and other elite universities could register there — this guaranteed a certain social circle and raised the value of the network at the expense of a smaller, rather than a larger number of participants. However, over time, this effect began to create problems — on Facebook, day by day, more and more advertising, spam, friendship requests are unknown from whom and unsolicited invitations to applications and games.
Content-based networks are subject to the reverse network effect in the form of degraded content quality. As the number of users creating content grows, it becomes more difficult to find something worthwhile. The ease of creating content, very important in attracting a critical mass of users, becomes an obstacle to growth.
You can fight this effect in two ways - by tightening the requirements for content creators and creating personalization, recommendation and search mechanisms.
The first method includes the mechanisms of voting, karma, pre-moderation and restrictions on the rights for beginners. Spam and inappropriate content can be removed by administrators in response to complaints from participants or automatically hidden from view, receiving a lot of negative feedback. Such a scheme is well known to any user of Habrahabr and, in one form or another, is present in any social network focused on content.
At the same time, the abundance of even high-quality content over time creates problems. It becomes difficult to find interesting materials, and personalization mechanisms become necessary. Any successful project allows you to customize the tape of events to your liking; automatic recommendation mechanisms often work.
Unfortunately, the reverse network effect cannot be completely defeated - too large a network becomes so demanding on server resources that the owners of the network have to willy-nilly have to break their own filtering mechanisms and recommendations in order to earn enough money to maintain the infrastructure. Paid accounts appear, from which you can push less relevant content for money, and the signal-to-noise ratio inevitably falls.
Making it difficult for newcomers to enter and create obstacles to creating content, in order to avoid the first two inverse network effects, it is easy to fall under the action of the third. The network can turn into a closed and conservative community with a rigid hierarchy, in which it is almost impossible for a beginner to get up. Without the influx of fresh blood, the community sooner or later rots and dies.
If the influence of the participants is proportional to the quantity and quality of the account they created, with the growth of the network, newcomers have less and less chance to compare with the "veterans", since their advantage only grows with time. Therefore, to maintain sustainable growth, the network must remain sufficiently democratic, with the possibility of a rapid "career takeoff."
Reverse network effects can easily bury any large network. The increase in the number of participants in itself is not guaranteed success. To compensate for these effects, it is necessary to achieve a balance between conflicting requirements:
Reverse network effects can not be completely defeated, and therefore large established networks will periodically die under their own weight, freeing up space for new ones. There is always a chance to create a “second Facebook”.
Sangit Paul Chaudry - an entrepreneur, analyst and business consultant from Singapore - believes that the cause of death of many large networks are the so-called reverse network effects , due to which the value of the network does not increase, but decreases with increasing number of users. How do they work?
The usefulness of any network comes from three sources - connections, content and influence (connection, content, clout):
- Connections allow participants to communicate, find new people, maintain and develop a network of contacts. This source of value plays a primary role for telephone networks, Skype, dating sites.
- Content is the main source of value networks such as YouTube, Flickr, StackOverflow.
- Influence allows advanced and professional users to conquer and maintain a constant audience of fans and subscribers - this aspect is very pronounced on Twitter or LiveJournal.
')
Naturally, real networks to some extent rely on all three sources, and the most successful of them fully exploit each.
However, as the size of the network grows, all three aspects may degrade - these are reverse network effects.
Connections
The flow of new users can actually worsen the quality of communication between network members - this can happen when a closed and obscure community suddenly becomes more open and popular. The flow of contact requests from unfamiliar people, spam and vandalism make communication online difficult. The signal sinks in noise. To avoid this, it is necessary to create "friction", which prevents the uncontrolled growth of the number of participants. Without such "friction" the network can show explosive growth, but a recession will follow very quickly.
A characteristic example is the anonymous ChatRoulette video chat, which first attracted a large audience, but the anonymity and the absence of the need to register resulted in psychos and exhibitionists flooding him, after which normal people fled from there.
One of the reasons for the success of Facebook was precisely that at an early stage of its development, it was able to avoid this effect. Initially, only students at Harvard and other elite universities could register there — this guaranteed a certain social circle and raised the value of the network at the expense of a smaller, rather than a larger number of participants. However, over time, this effect began to create problems — on Facebook, day by day, more and more advertising, spam, friendship requests are unknown from whom and unsolicited invitations to applications and games.
Content
Content-based networks are subject to the reverse network effect in the form of degraded content quality. As the number of users creating content grows, it becomes more difficult to find something worthwhile. The ease of creating content, very important in attracting a critical mass of users, becomes an obstacle to growth.
You can fight this effect in two ways - by tightening the requirements for content creators and creating personalization, recommendation and search mechanisms.
The first method includes the mechanisms of voting, karma, pre-moderation and restrictions on the rights for beginners. Spam and inappropriate content can be removed by administrators in response to complaints from participants or automatically hidden from view, receiving a lot of negative feedback. Such a scheme is well known to any user of Habrahabr and, in one form or another, is present in any social network focused on content.
At the same time, the abundance of even high-quality content over time creates problems. It becomes difficult to find interesting materials, and personalization mechanisms become necessary. Any successful project allows you to customize the tape of events to your liking; automatic recommendation mechanisms often work.
Unfortunately, the reverse network effect cannot be completely defeated - too large a network becomes so demanding on server resources that the owners of the network have to willy-nilly have to break their own filtering mechanisms and recommendations in order to earn enough money to maintain the infrastructure. Paid accounts appear, from which you can push less relevant content for money, and the signal-to-noise ratio inevitably falls.
Influence
Making it difficult for newcomers to enter and create obstacles to creating content, in order to avoid the first two inverse network effects, it is easy to fall under the action of the third. The network can turn into a closed and conservative community with a rigid hierarchy, in which it is almost impossible for a beginner to get up. Without the influx of fresh blood, the community sooner or later rots and dies.
If the influence of the participants is proportional to the quantity and quality of the account they created, with the growth of the network, newcomers have less and less chance to compare with the "veterans", since their advantage only grows with time. Therefore, to maintain sustainable growth, the network must remain sufficiently democratic, with the possibility of a rapid "career takeoff."
Summary
Reverse network effects can easily bury any large network. The increase in the number of participants in itself is not guaranteed success. To compensate for these effects, it is necessary to achieve a balance between conflicting requirements:
- The network should create some "friction" at the entrance, preventing an uncontrolled influx of participants
- A highly scalable moderation and content assessment system should be created.
- Convenient and effective recommendation and personalization mechanisms should exist.
- You can not allow "hazing" and the emergence of a rigid hierarchy.
Reverse network effects can not be completely defeated, and therefore large established networks will periodically die under their own weight, freeing up space for new ones. There is always a chance to create a “second Facebook”.
Source: https://habr.com/ru/post/164131/
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