Network Effects in Product Management Explained

Network effects occur when a product or service becomes more valuable to its users as more people use it. This concept is crucial for product managers to understand, as it can lead to exponential growth and create barriers to entry for competitors.


Facebook's success is largely attributed to network effects. As more people joined and connected with friends and family, the platform became more valuable and indispensable to its users, driving its growth and dominance in social networking.