Question
The blog A16z provides insights into how successful companies like eBay and Airbnb started with relatively modest markets and grew beyond their original estimates due to network effects. They were able to offer a service that solved a real problem for a small community and then expanded from there. This shows the importance of focusing on solving a real problem and leveraging network effects for business growth and gaining market shares.
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While VCs want to see big numbers, many of the best companies had relatively modest markets to begin with. For example, eBay and Airbnb both thought their market shares were a lot smaller than they ended up being. Because of network effects, these platforms grew to scale well beyond the original estimates because they proved they could do the hard part: offer a service that solved a real problem for a small community. Then, they grew from there. For more insights like this, check out the great blog A16z wrote on the topic here.
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