Question
Some real-world examples of the implementation of network effects as discussed in the book "Better, Simpler Strategy" include Uber and DiDi. Uber, despite having 3 million drivers globally, has to compete in every new market it enters due to the geographical boundaries of network effects. On the other hand, DiDi, once it grew in China, was able to leverage regional network effects to create a powerful first-mover advantage, making it difficult for global companies like Uber to compete.
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Network Effects can provide formidable advantages, and markets often tip in favor of a few companies. However, many network effects are bound by geography. Uber has 3 million drivers globally but still has to compete in every new market it enters. Regional network effects create powerful first-mover advantages. Once DiDi grew in China, Uber stood no chance even though it was a global behemoth.
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