August 6th, 2009 -- Posted in Bussiness, Networking |
Many web sites also feature a network effect. One example is web marketplaces and exchanges, in that the value of the marketplace to a new user is proportional to the number of other users in the market. For example, eBay would not be a particularly useful site if auctions were not competitive. However, as the number of users grows on eBay, auctions grow more competitive, pushing up the prices of bids on items. This makes it more worthwhile to sell on eBay and brings more sellers onto eBay, which drives prices down again as this increases supply, while bringing more people onto eBay because there are more things being sold that people want. Essentially, as the number of users of eBay grows, prices fall and supply increases, and more and more people find the site to be useful.
The collaborative encyclopedia Wikipedia also benefits from a network effect. The theory goes that as the number of editors grows, the quality of information on the website improves, encouraging more users to turn to it as a source of information; some of the new users in turn become editors, continuing the process.
July 29th, 2009 -- Posted in Bussiness, Networking |
Network effects were used as justification for some of the dot-com business models in the late 1990s. These firms operated under the belief that when a new market comes into being which contains strong network effects, firms should care more about growing their market share than about becoming profitable. This was believed because market share will determine which firm can set technical and marketing standards and thus determine the basis of future competition.
A good example of this strategy was that deployed by Mirabilis, the Israeli start-up which pioneered instant messaging (IM) and was bought by America Online. By giving away their ICQ product for free and preventing interoperability between their client software and other products, they were able to corner the market for instant messaging. Because of the network effect, new IM users gained much more value by choosing to use the Mirabilis system (and join its large network of users) than they would using a competing system. As was typical for that era, the company never made any attempt to generate profits from their dominant position before selling the company.
Network effects become significant after a certain subscription percentage has been achieved, called critical mass. At the critical mass point, the value obtained from the good or service is greater than or equal to the price paid for the good or service. As the value of the good is determined by the user base, this implies that after a certain number of people have subscribed to the service or purchased the good, additional people will subscribe to the service or purchase the good due to the positive utility:price ratio.
May 4th, 2009 -- Posted in Marketing, Networking |
If you’re in the market for a business opportunity, the chances are good that you’ve explored a variety of ways to make money online and work from home. In truth, there are so many Internet business opportunities out there that it’s almost impossible to tell the best from the rest. And the grim reality is that, while thousands of people launch online businesses in the hope of achieving financial freedom, the majority end up making very little money at all, or worse, paying out more money to their uplines than they’re ever able to recoup.
The good news is that, with the right partnership, you can promote your existing business while multiplying your revenue streams. That way, you don’t have to rely on a single, make-or-break source of income. It’s a bit like planting a garden. It would never cross your mind to plant a single seed in the spring and count on that to feed your family throughout the summer. Instead, you’d plant many varieties of seeds, knowing that one or more will bear fruit as the seasons progress.
The Internet business partner you choose should be one that can provide you the one thing that is the downfall of most work from home opportunities: training. All too often, people who intend to succeed come up against their own limitations and fail to properly market their products. In our garden analogy, that’s like planting your seeds in a drought – why bother? The company you select should have a proven track record of Internet marketing success, and give you the water spigot and hose you need to tend to your business garden.
So, make sure to look for a company that provides you with training on topics ranging from online and offline marketing to back office functionality and goal setting. They should also be equipped to provide you with tutorials on a wide variety of powerful marketing techniques. After all, there’s stiff competition on the Internet, and in order to successfully compete, you need to know all there is to know about methods such as article marketing, blogging, email marketing, banner advertising, press releases, pay-per-click advertising, and viral marketing – just to name a few.
At the same time, being knowledgeable about Internet marketing doesn’t mean that you need to reinvent the wheel. Instead, look for a business opportunity that provides you with tools like professional lead capture pages, automated follow-up, a sales center, and a secure website. Ideally, they should also provide you with highly sought after products that you can re-sell – items like audios, videos, software, templates, and guides. This way, you can increase those revenue streams by earning a healthy commission on every sale, and still have the professional infrastructure in place to promote your existing business.
When you know what to look for, it’s not difficult to separate the best Internet business opportunities from the dregs. In no time at all, your seeds will have sprouted, your plants will bloom, and you’ll be reaping a bountiful harvest.
