Such network effects are one reason why many Exponential Age firms, like Facebook, PayPal, Microsoft, Google and eBay, are so large and successful. As we’ve seen, these companies were made possible by the exponentially increasing power of computing. But the network effect is what drives them to ever-bigger gains. Most people who use a consumer social network use Facebook because that is where everyone else is. Businesses accept Visa or Mastercard because they are the platforms with the most buyers on them. This positive feedback loop makes the business better and stronger as it gets bigger.
