Network Effect

A network effect is when a product or service becomes more valuable as more people use it. The telephone is the classic example: a telephone network with one user is worthless; with two users it has value; with a billion users it's essential infrastructure. Social media platforms are among the strongest network effect businesses ever built — the reason you're on Facebook, Instagram, or Twitter is largely that the people you want to talk to are already there.

What it means

Network effects create powerful competitive moats. Even a technically superior social network struggles to displace an incumbent because the incumbent has the people — and social networks are valuable precisely because of who's on them, not their features. This is why Twitter alternatives have historically struggled to gain traction despite offering superior moderation policies or features: Twitter had the journalists, the politicians, and the celebrities that make a platform the place where things happen.

The counter-force: when a platform's network turns hostile or actively repels users through censorship, the network effect can work in reverse. Every high-profile deplatforming event that sends a large account and their followers elsewhere takes network value with it.

How it works on Gab

Gab is building its network effect by being the platform that doesn't deplatform — attracting the speakers and audiences that have been expelled from mainstream networks. Each wave of deplatforming on Twitter, YouTube, or Facebook sends accounts and their followers to Gab, adding to its network value. With 30+ million monthly visitors, Gab has achieved significant network scale, particularly in conservative, Christian, and libertarian communities.

Related terms

Network effects power Interactive Media & Services businesses. Deplatforming can accelerate network effects for alternatives. The 1% rule determines who generates the network value.