Networks, products and their relativity*

Thesis

  • Products (including services, technologies, and applications): Discrete in nature, and surviving only as their useful life allows. The duration is increasingly abbreviated as competition, disruption, and commoditization, are being driven steadfast by technical advances.
  • Networks (including platforms, marketplaces, exchanges, and other interconnectivities): Dynamic and more akin to biological ecosystems. Networks grow and resist disruption, aided by network effects that are now becoming data-centric with the emergence of digital communication and information processing.

From historical to modern manifestation: similarities and differences

  • For products, economic lives have been further threatened by the prevailing influence of software as a production mechanism and efficiency enhancement, as well as, often enough, a finished good onto itself. This is inexpensive to create, distribute, replicate, and build upon. The effect has been of ever greater and more capable competition, faster commoditization, and, in many cases, deflationary economics.
  • For networks, the creation of mature topologies has been expedited by efficient, inexpensive, and ubiquitous digital transmission. The management of new network infrastructure has been aided by improved and less capital intensive solutions. (By the same token, some networks have as a result been quicker to collapse or be replaced by newer variants.)

Multiplicity as value driver

  • Broadcast networks (including but not only media/entertainment) have generally been one-directional and one-dimensional, and are thus less substantive in the modern digital context. The traditional retail model may be an analogous example.
  • Brands have sometimes been confused for networks, due to their market presence and clustering effect, but this is not necessarily the case.
  • Messaging applications are multi-directional, but usually single-dimensional, and their network effects can be accordingly fickle.

Product depth and network presence

  • Products are useful to networks in so far as these enable new directions, dimensions, and possibilities (optionality).
  • Networks are necessary to products, which are otherwise isolated and lifeless. (The life and very character of products can be substantially enriched by networks.)
  • It can be easier for a network to launch a product than for a product to launch a new network, because network effects are difficult to create and predict. But a thoughtful combination of products may succeed.
  • Many businesses do not operate in pure product or network form, but combine aspects of both to varying degrees.
  • It is possible to show long-term success as pure product, but not without continuous upgrade, update, or reinvention… which eventually becomes a network of sorts.

* Note

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