An illuminating insight occurred last week around network effects and value creation. The strange thing is that nobody cared. I was blown away by both: insight and (lack of) discussion.
Here’s the story, morning glory:
Some old guy 
comes up with some principle (”for many phenomena, 80% of the consequences stem from 20% of the causes”).
A few years later people discover that user generated content on many sites is created by ~1% of users.
A (slightly younger) guy 
realizes an opportunity and tries to capitalize on it.
I understood both principles and enjoyed the play by the (slightly younger) guy. And yet. An unsettledness persisted. It was astute, clever and, from an economic standpoint, right. And yet. I didn’t (and don’t) believe that 1% of users being active creates enough value to seed/scale long-term value from network effects.
Enter the insights from (somewhere inbetween) guy 
.
- 1 % of users will be the active content producers (1% principle)
- 80 % of the users are merely consumers, not contributors (Pareto)
“…the gold is in the other 19%…”
“If you can figure out how to engage these folks, you win. If you don’t, you’ll have a site driven merely by the 1%, which ultimately won’t scale. While theoretically the law of large numbers should apply (e.g. as N (= number of users) gets big enough, life is good), I hypothesize that if you don’t figure out how to engage this 19%, you won’t drive growth in N that will get you big enough to have the law of large numbers effect deliver you to happiness.”
I reread the post a few times. If you get a similar thrill from thinking about and trying to understand the transformative power of the internet this insight must thrill you. I found it delicious.
I’ve been trying to spend as much time as possible thinking about Brad’s insight. The input from the 19% doesn’t have to be large but how do you engage them? I understand the motivation for the 1 % and 80 %, but what about the 19 %? Can anyone think of examples/cases of a situation where the 19 % is well understood?
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