Andrew Chen is my hero. He does a fantastic job talking about the math the drives social network growth and decline.
Snip…
Does everyone remember Metcalfe’s Law? It was formulated by Bob Metcalfe, the inventor of Ethernet and co-founder of 3Com, who stated:
The value of a network is proportional to the square of the number of users of the system (n²).
For those that are interested in the math behind it, basically the idea is that if every new node in the network connects with every pre-existing node, then as you gain nodes, you non-linearly increase the number of connections that everyone has with everyone else.
That’s pretty neat, and for the social networking folks who are aggregating large audiences and treating their businesses like communication utilities, it’s both logical and helpful to think that these social communities abide by network effects like Metcalfe’s Law. In fact, it’s a DIRECT reason why these networks want to get as big as possible, and have a social graph that’s as comprehensive as possible, and why they should ultimately be opposed to Data Portability. And I think we’ll see these players’ strategies ultimately reflect these strategies.
A commenter goes on to about companies being a leaky bucket. You either spend more money driving visitors to your site or you focus on retention, plugging the hole in the bucket. Great analogy.
Metcalf’s law works for dating sites but I disagree that dating sites should not embrace data portability, instead opening up their API’s to share data with social networks and other dating sites.
