When launching a startup, one of the best ways to ensure its success is by creating a network effect. With this phenomenon, when a certain service or product attracts a larger number of users, the service or product itself increases in value for other users. More people will also trust that product or service.
Prominent examples of the network effect include cutting-edge technology like blockchain. As more people use Bitcoin, for instance, there are more benefits to the users. There are also more incentives for people to own Bitcoin when more users are available to trade the currency.
How to Create Network Effects?
Grab the attention of potential customers as soon as you create your startup. Facebook did this effectively by using the Harvard student directory to launch the platform (Hariharan). Facebook even created some of its own accounts to help potential users perceive the platform as more successful than it really was. This is how you should treat your startup. Once you decide to launch your startup, don’t start tiny if you want to harness the network effect. Drive engagement fast.
Retain Your Customers
You won’t be able to create an effective network if your customers don’t trust you and don’t want to continue using your services. Once again, Facebook exemplified the right way to do this. They discovered that if they could connect users to 10 friends in the first 2 weeks of using the platform, they were more likely to continue using the platform (Hariharan).
Customer retention is also about having exceptional customer service for them, according to Nirmala Reddy. Even when your customers don’t have a great experience with your company, show them you value them and their business. Make their experience so good that they’ll want to tell their friends about your company.
Make Room for Growth
When you are able to successfully create a network effect, your business will have to grow. There will be more users and a greater demand for your product. If your company doesn’t appropriately plan for this growth, your service or good will be overused (Reddy). Too many people using your company’s good or services creates congestion (Network Effect). Make sure your good or business can increase in circulation without quality suffering.
Choose Partners Wisely
The right partnerships can propel your startup to success! When you partner with Consilience Ventures, your startup will experience accelerated portfolio success. We are a collaborative entrepreneurship network of experts, corporates, medium-sized business owners, technology investors, world-class universities, and research labs. Not only can we help your business in its at all stages, but we can help it experience continued success throughout its lifecycle. Our network design incentivizes the community to create that hyper-network effect that has never been done before.
Imagine if you were part of a community where everyone wanted to see you experience success—if your service providers wanted to give you more for the same price. Envision a world where investors saw you as a low-risk investment although you are doing truly innovative.
Finally, imagine if every person you talked to had a financial and a personal interest in seeing your success grow.
That’s what Consilience Ventures is about.
A partnership with Consilience Ventures will set you apart from your competition and set you up for success. To know more about how Consilience Ventures works, contact us today and cultivate a lasting partnership.