A network externality is a phenomenon in which the value of a product or service increases with increased usage. For example, if you have 10 friends on Facebook and all of them have 100 friends each, then your social media platform has 1 million “friends.” This creates an external benefit for those who use it because they can reach more people through their connections. The term “network externality” was first coined in 1969 by sociologists to describe the fact that a network’s value increases when others use it and decreases when they leave. If you want your social media platform to thrive, then make sure there are always new people on it so that old ones don’t quit!
In order for this phenomenon to take place with any product or service, however, its users must be interconnected through some kind of network such as Facebook. For example, if someone has 50 friends on Facebook and all of them have 100 friends each too, then their account will reach up to 500 million other accounts – which is much more than what just one person could ever hope to connect themselves with unless the entire