Ask HN: Disrupt companies which depend upon network effects? Are there examples of methods which have been successfully used to disrupt companies that have established themselves due to network effects? In other words, once a company has gained advantage due to network effects, it is game over? |
It seems the cycle is something like this:
(1) Something comes out that is really cool, like AOL, Skype, or MySpace
(2) Thanks to network effects this service doesn't adapt to competition
(3) ... until it is too late. Now Facebook is cool and Zoom is cool.
If the industry had settled in on a standard, there might have been innovation in chat clients. Instead we keep getting the same chat client as 20 years ago except now it is tied to Facebook and the other is tied to AOL.
Social platforms might burn out naturally. For instance, young people were attracted to Facebook when young people where there exclusively but when it became a way to update your grandma about what you are doing, kids switched to other platforms, which Facebook bought.
Facebook badly wants to make a social network aimed at the under-14 set because they think they can escape the obsolescence treadmill this way.
You build something that a few people really love, as opposed to something that everyone likes. Facebook did this with colleges. Pinterest with sharing. TikTok with content micro-creation.
Facebook throws a lot of money into trying to pin TikTok but it's doing poorly because it fails to understand why and because they try too hard to appeal to the mainstream. It's promoting sexy dance videos on its Reels, and the data supports this for obvious reasons. But TikTok has been more about the enjoyment of dancing with others, rather than ogling dancers.
Clubhouse had a good run but also went through the lifecycle of social media. At some point it goes from fun and happening to overpopulated and toxic, and unless quality control can catch up, it collapses.