Network Effects
DEFINITION
A product property where each additional user makes the product more valuable to existing users.
In depth
Classic network effects: social networks, marketplaces, communication tools. SaaS network effects are subtler — shared workspaces (Figma, Linear), integrations ecosystems, data network effects (more users → better ML model → better product).
Network effects compound moats. They take years to build but are almost impossible to unwind once present. If your product has even a weak network effect, amplify it early.
Related terms
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Last reviewed 14 April 2026 by Abhi Verma.