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A Summary of

Reid Hoffman’s Playbook for Growth and Network Effects

by
James Currier
NfX
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Network effect businesses are hard to execute

Building Innovative Business Models

Business model should minimize two growth limiters 1. Product market fit 2. Operational scalability Maximize four key growth factors 1. Market size 2. Distribution 3. High growth margins 4. Network effects

Network Effects in LinkedIn

  • Leveraged direct and two sided network effects
  • Direct: more users make the network more valuable
  • Two sided: more users attract more corporate employers which increases the value of the network

Distribution

  • A good product with great distribution beats a great product with poor distribution
  • Network effects produce and require aggressive growth
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