From Network Effects to Memory Networks
The classic network effect story: each additional user increases platform value for existing users. At scale, this creates winner-take-all dynamics.
But several forces are eroding this advantage:
Multi-homing: Users now easily maintain presence across multiple platforms. The switching cost is near zero.
Platform fragmentation: Niche platforms can serve specific communities better than generalist platforms. Network density matters more than network size.
API-mediated access: You don’t need to be on a platform to access its value. Tools aggregate across platforms, reducing lock-in.
Declining engagement returns: After a certain point, more users don’t meaningfully increase value. Your 10,000th LinkedIn connection matters less than your 10th.
The traditional network effect curve: steep initial climb to critical mass, then flattening returns. The moat is strong but finite.
Memory networks operate differently.
