The Facebook 'Fad'?

Facebook is not a fad. I say this because I don't feel that its popularity will slow anytime soon. This is because of Metcalfe’s law. Let me explain...

The general idea behind
Metcalfe’s law is that the larger a network grows, the more valuable it becomes, because every new person who joins the network adds value to everyone else who is on the network. A good example of this phenomenon at work is user forums. Online forums are where people go to get their questions answered. The more members that join a forum, the faster questions will be answered, and the more diverse the opinions and skill levels - thus adding value to the network.

This notion of more sign-ups raising the value of a program has the opposite effect for some things, however. If you consider how a contest works, your chances of winning go down the more people you invite to enter.

The value of
Xbox Live, an online gaming community, certainly goes up as more people sign on, and it was a player's dream when it hit 10 million users over the holidays! (Marketing Profs Podcast, 2008).

The same can be said for
iPods, but the type of value increase is slightly different. For every person who buys an iPod, the community of iPod fans is strengthened, increasing the 'bandwagon' effect, and resulting in higher sales for Apple.

Now back to my initial prediction for
Facebook. Over the month of December, 2007, Toronto became the first North American city to have over one million subscribers to Facebook (Zinc Research, 2007), and approximately half of online Canadians were said to be on Facebook in December, which is almost double the rate of a few months earlier!

This constant growth for Facebook is a success that can be attributed to the workings of Metcalfe's law, and it is the reason I don't see the trend slowing down anytime soon.

Can you think of a product or tool, online or offline, which is self-reinforcing?


  1. I couldn't agree more with the networking strategy, but must seriously add to the expanding growth in Flickr.com and obviously the beginning of what I call the Image Era.
    (Got camera.... what next?)
    Upload to the Internet. Most image hosting sites have become digital dumps and I must say with the foresight that flickr is putting forth, it's going to be the absolute hub for images in no time and it's already a blogger's Heaven.
    Images will also change because of the vast amounts being taken every single moment.
    That would be my two 'sense'.

  2. Another, much older example are fax machines. Fax machines were designed to deliver letters instantly rather than having to mail them. Being an early adopter for fax machines wasn't all that rewarding though - few could receive your faxes and few could send one to you. Only when a critical mass of businesses had adopted fax machines, did they gain the traction needed to transform a rather menial business process (sending a letter) into a near instant communication - and in the process it added a layer of credibility to have a fax number on your business card (now you were a real, with it business).
    Many businesses still have faxes of course, but in many industries they are getting less and less use. Today, it seems it's e-mail and url that bestow that credibility.
    As we think about the power of networks it's interesting to observe the power of disruptive technologies. Postal services were challenged not only by courier services but by a brand new technology designed to "send a letter" biut used a totally different method to achieve that and thus had a completely new business model. Then we had e-mail, a new disruption, to send that letter even faster and without needing to print it. Now I use Facebook to send not letters - but thoughts, play games, post pics. Almost needless to say, postal services have a hard time letting me send a thought.