Since the advent of Web 2.0, everyone seems to be obsessing about network effects. It’s the idea that the value of a product increases as its user base increases. Robert Metcalfe even proposes that the value increase is equal to the square of the number of users. However there are limits to how beneficial a network effect can be. Too many users can result in congestion. We are all too aware of the headaches of rush-hour traffic, a negative network effect of everyone owning a car.

Another undesirable result can be a sense of getting lost in the crowd. I recently started using Path to keep in touch with friends, because 200 people dumping their goings-ons into your Facebook News Feed can diminish the sense of closeness it purportedly offers. Path does exhibit a network effect, but to with a limit. (The article calls this a local network effect.)  It only works if my close friends and family join; as soon as distant acquaintances start hopping onto my Path network, the value is gone. 

Indeed there seems to be a kind of backlash these days against the single-minded pursuit of infinite user acquisition. Yes, the network effect can be a powerful, world-shaking thing, but unbounded growth can also be dangerous to your business model and the experience of your existing users. There is a rising emphasis on curation, intimacy, and exclusivity (or at least perceived exclusivity). Examples are Fab.com, Fridge, and Vimeo. Seth Godin even wrote a book about it.

Network effects are undeniably a powerful tool in technology’s arsenal for impacting lives and affecting change, but I think it should be pursued carefully. Growth for the sake of growth is unhelpful, much in the same way that cancer is unhelpful, to say the least. It can feel good to dominate the market as Facebook has, but is Facebook still serving its users needs as well as it did in the old Harvard days? (This is a separate debate, so I’m going to leave it at that.) I think that market domination is a red herring; it distracts one from the real goal, which is to create as much value for your individual users as possible. In the long run, consistent value is the only thing that sustains a business.

As designers and entrepreneurs, we should be cognizant of when growth is actually beneficial, producing positive returns on value as the user base grows, and when it is detrimental to the user experience. And if the latter happens, we have to be clever and courageous enough to do whatever it takes keep our original value promise for each and every user.