The New Network Effects: Make the World Smaller (Not Bigger)

For over a decade, I’ve been working with businesses aiming to unlock the magic of network effects.

From tech monoliths to bootstrapped startups, network effects have completely reshaped how we interact online. Reflecting on my own digital journey—from the days of AOL instant messenger to today’s endless content streams—I’ve realized that while network effects have expanded our virtual worlds, they now invite us to make our corners of it cozier.

Is it possible, perhaps, that in this next era of tech-fueled growth, we might use the power of network effects not to make the world any bigger, but to make it smaller?

When I first got online, around the year 2000, I remember creating my first username, in an AOL instant messenger app and asking the question: “Is anyone else here?” 

The promise and possibility of interacting with new strangers from all over the world was exciting and new. What was it like to walk down the street in Sydney, Australia? Could I practice my French with someone I’ve never met? 

At school I swapped my username, aussilandgirl, with my friends and we’d go home at night, log onto our parents’ desktops, wait for the dial-up Internet to activate, and type mundane questions back and forth. Sometimes I’d do the thing I wasn’t supposed to and dip in and out of various chatrooms, meeting people with the oh-so-cringey greeting: “A/S/L” (Age / Sex / Location). 

Because of my username, everyone assumed I lived in Australia. I thought that was hilarious. Didn’t they know? I was just a random 13-year-old in the suburbs of Pennsylvania. But of course, on the Internet, you can be anyone you pretend to be.

I’d ask people what other things they used the Internet for. I made myself a mean Neopets collection. I pretended to be a literary critic by forcing myself to read published research on critical narrative discourse from people like Michael Bloom. I made a blog on Xanga and shared weekly updates on life and high school with everyone in my class. I still also kept a physical diary, but even those early entries were peppered with instructions for a “future reader” to email me with any feedback they had to share. (Um. What?)

Even then, I seemed to sense a groundswell of change happening: Every day, my tiny corner of the world got a little bit bigger. It happened very slowly and then all at once, though I couldn’t place what exactly it was called.

Of course, what was happening in conference rooms from Silicon Valley to New York City was that the playbook of network effects was being written.

Through learning-by-immersion therapy at a string of web2 and web3 businesses, the concept of activating the flywheel of growth for network effect based Internet businesses runs through me like a constant I/V drip. 

The playbook goes something like this:

1. Create a cool app that collects more data the more people use it.

2. Activate a flywheel of new users and new content built upon that captured data.

3. Achieve hockey stick growth for daily and monthly users.

4. Make money off those users.

5. Inject an adrenaline shot into your business with a ton of external money.

6. Scale your business until it breaks.

7. Pray for the 10x return.

8. Burn out 1/3 of the team (and yourself) along the way.

9. Look for the next roller coaster to ride.

In the venture-backed tech world, the term “network effects” has become shorthand for what’s required to take home the trophy as a founder. By one account, network effects alone are responsible for 70% of the value created in technology since 1994. It’s the secret ingredient for any recipe, one that transforms a company from “a nice lifestyle business” into a fire-breathing dragon. 

So much so that the promise of striking gold for entrepreneurial-minded people of this generation sometimes feels uniquely skewed toward one extreme end of the spectrum: Go big, or go home.

Many of the most successful Internet businesses hinge on a network effects strategy at their core. This is probably old hat for many of you, but just to cover all of our bases, here are a few examples of network effects in broad consumer apps:

Google:

1. Launch a platform for searching and indexing web content.

2. Encourage users to add more content to the internet.

3. Network effect takes hold, search engine bets better.

4. More people come in, more content comes in.

5. Achieve an infinite scroll of content.

Instagram:

1. Build a photo-sharing app.

2. Encourage people to upload their photos.

3. Network effects take hold, app is more fun to browse with more photos.

4. More people come in, adding more photos.

5. Achieve an infinite scroll of photos.

TikTok:

1. Create a short-form video content platform.

2. Get users to upload videos.

3. More people find video content they want.

4. More creators, more content, more users show up.

5. Achieve an infinite scroll of video streams.

In each case, the core strategy revolves around leveraging network effects to create a self-sustaining cycle of growth and engagement. While admittedly only a few businesses have reached true “escape velocity” of the infinite scroll, so to speak, the reach of that select few is so outsized that now nearly every person on the planet has some concept of what it feels like to be literally, drowning in a network.

As Bo Burnham put it back in 2021, the Internet gave us “a little bit of everything, all of the time.”  

Put another way, today, the day-to-day experience of an average person using the Internet feels a lot less like walking around a small town where everyone knows your name, and a lot more like clenching your teeth while pushing through the crowds in Times Square, feeling constantly overstimulated by people, strangers, and flashy ads trying to get your attention.

My experience is hardly unique. 

When we first got online about 25 years ago, many of us asked the question, "Who else is here?" We sent out beacons and questions in chat forums, feeling a thrill when someone responded. We loved that little surge of dopamine or recognition, so we kept asking: "Who else is out there? How can we make our corner of the world a little bit bigger?"

Now we know who’s there. 5 billion of us. 

Let’s be honest: Nobody can count that high. Somewhere along the way it became a literal stack overflow. We’re getting lost in our own thoughts and our own infinite content streams. It’s impossible to keep up, even with newsletters of people you know. (Which, by the way, is why I’m easing up on my own publishing cadence next week.)

But I can sense the tides shifting a bit once again. Slowly at first, but then I think it’s going to hit us like a rainstorm.

On Twitter last week, Julian Weisser introduced the idea of “Cozy Hacks” – or mini hackathons hosted inside of homes. The premise is this: Rather than the typical hackathon style setup (ie: “pack as many developers as possible into a giant room, order a few pizzas and let everyone cut loose”), the goal of “Cozy Hacks' 'is almost the opposite. 10-30 people max. Hosted in homes, not offices. Just for people who want to show up and make something magical, together. I loved this concept and would like to host one on my roof deck when the weather cools off a bit this fall.

This is one example of what I’m noticing as a growing trend of micro-communities taking hold of our cultural consciousness, particularly in a post-COVID era. Now that we’ve all felt the acute pain of hyper-loneliness locked up in quarantined environments for months (if not years) on end, we all seem to have emerged with a shared, collective sentiment: Let’s make the world a little bit smaller, together, not bigger.

A friend of mine recently moved back to New York City after some time away and noticed that the places where tech people convene aren’t quite as obvious as before. He’s not wrong. The blowout New York Tech Meetups of the 2010s have been replaced by smaller home gatherings. The open-invite, endless scroll listings of Meetups and Eventbrite have been swapped out for individualized, text-based apps like Partiful and Luma.

Back in those days, you just needed to know where the event lists were kept online. Today, you better know someone who can get you on the list.

In 2024, we don’t want a scene where we can be seen. We want dinner parties. Salons. Meaningful quality discussion. Back in 2022, I hosted a 10-part “garden party” series in my backyard, with a new discussion topic each week and a group size of no more than 12 people. I always told people these were two-hour conversations. People always stayed for 3 or 4 hours. We are craving connection more than ever.

I want life on the Internet to include all the perks of big city life, with all the coziness of a small-town feel. I think this is possible and more within reach today than ever before.

Today I live on the Upper West Side, and I’m lucky enough to have access to a private roof deck at our apartment that sits in a very visible location from five floors up. I like to stand in the middle of the roof and look around at the windows that surround me on all sides. There are 1,000+ windows within view. I look out across all these anonymous windows and buildings and roofs and ask, “Is anyone else here?”

How unusual. Some 25 years later, I’m still asking the same question as when I was 13. But instead of asking who’s online, I’m just trying to figure out who lives next door

It’s harder to tell during the day if anyone else is home. Too many windows, and the sun shines too bright. But at night, you can tell who keeps their lights on. Now I know who the night owls are—who else, like me, might be having a hard time sleeping at 2 am. I don’t know their names, but I know their windows. One time I counted to see how many made up our night owl collective that night. There were 28 of us.

1000 is a big number, but 28 is a cozy number. I could fit 28 people on my roof. Wouldn’t that be nice.

When remarking to a friend recently about my desire to start a block association for my neighborhood, he smiled and said, “It must be nice to feel like you’re coming back home.”

I didn’t disagree but asked what he meant. He went on to share that, among his network, he’s noticed that many others are also coming around to a “homecoming” feeling, returning to things they once loved after being jerked back and forth through a pandemic and political chaos.

Maybe like me, other people are realizing that, in a world dominated by vast digital networks, it does feel nice to have a smaller, intimate community. That there’s no replacement for a close-knit connection. The tricky bit of course is how to balance both—using network effects to create spaces that feel both personal and broadly connected. Maybe cozy networks are what we all need right now to foster genuine relationships and create environments where everyone feels seen and heard.

After all, a world where 28 people can gather comfortably on a rooftop sounds perfect to me.