The Power of Hyper-Local Network Effects

You're launching a new product or service. A genie comes along and tells you: "I'm going to give you 100 darts to throw at a map. Whoever lives where each dart lands will magically become a loyal customer. And the best thing is, you get to choose which map to throw them at!"

Should you:

1. Throw them at a map of the world? A map of the United States?
2. Throw them at a map Massachusetts? A map of Cambridge?
3. Or throw them at the campus map of Harvard University?

You're relying on these first customers, the early adopters, to be the community that gives feedback to improve your offer. Ultimately, you hope they'll also influence the next wave of customers when you've proven you can listen to them in a meaningful way.

Could Facebook have become what it is if it had gone from stealth mode, building out its minimum viable product, straight into a global launch? I don't think so.

Network effects are powerful things, and global networks  Facebook's scale even more so.

But networks thrive not just on the scale of users, but on the scale of the sub-networks they've aggregated. The attention of every student in Catherine-Monica Dormitory at Gonzaga University is much more valuable than ten times as many students spread across the Pacific Northwest in measured by viral potential.

The reasons are pretty simple:

1. It's hard to believe, but (most) humans still influence and are influenced by in-person interactions with other humans.
2. The opportunity cost rises for not participating in the service: you'll be left out of the "cool thing" that has everyone's attention.
3. The in-person interactions themselves add value/enjoyment to the experience.