Five Competitive Advantages : Network Effects

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%.

Here are five sources of competitive advantage:

-Recurring revenue

-Channel access

-Platform based solution instead of singular products.

-Network effects in action–the value of the product increases with the number of users

-Virality (not the same as network effects) (users invite other users)

Most businesses increase in value as the customer base grows as it validates the product/service and encourages others to use it. If a business can harness that customer base and turn it into a community that more aggressively attracts other users then it’s a competitive advantage. 


Hall T. Martin

Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

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