Measuring Network Effects

Had mentioned this once before, the topic has come up again, so I repeat it again.  Good overview.  The 16 ways are specified at the link.

Andreessen Horowitz
16 Ways to Measure Network Effects
by Li Jin and D'Arcy Coolican

Network effects are one of the most important dynamics in software and marketplace businesses. But they’re often spoken of in a binary way: either you have them, or you don’t. In practice, most companies’ network effects are much more complex, falling along a spectrum of different types and strengths. They’re also dynamic and evolve as product, users, and competition changes.

For founders, it’s important to understand the nature of your company’s network effects — including deciding on the set of metrics that help you understand what’s working or not. So, building on our previous metrics lists (here and here), we’ve compiled a list dedicated to measuring and teasing apart network effects in particular. We share them below, divided into 5 main categories to measure network effects: acquisition, competitors, engagement, marketplace, and economics-related metrics.

Every single network effect business is different depending on the particular product, audience, and environment, so there’s no-one-size-fits-all list of measures. In general, however, for two-sided marketplaces matching supply and demand, pay special attention to the marketplace and unit economics sections; for social networks (including workplace ones), what matters most is engagement and activity. In the end though, it all comes down to the very definition of network effects: whether your product becomes more valuable as more people use it. Because only then can you go about creating and growing that value for users, and for your business.  ... "