Five Competitive Advantages: Network Effects

Fundraising

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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