Rachel Anderson
Why are positive network effects so crucial to the success platform strategy?
Positive network effects are crucial to success because the value of the service will increase customer
and that will increase the number of participants willing to use said product or service.
Why is it so difficult to initiate positive network effects?
It is difficult to initiate positive network effects mostly because demand for the product is not especially high or the product is new and consumers may not see a need to use said product. You would have to show why the consumer would want and incentives them using it.
How did PayPal overcome the thorny chicken-or-egg problem?
There first step was making signup easy. The next step they used was incentives for every customer to sign up the get “free” $10 along with referrals. With the convenience of the service the demand for sellers to use the app skyrocketed also. They were able to leverage demand.
Through there dealing with eBay they made it possible to connect buyers and sellers through online payments. They were able to show the potential use and the value of the product to customers.
