The Waze-ification of the Physical World
This article describes a growing trend of transforming products into social networks that can reap the benefits of the network effect. The main product it examines is Waze, a GPS navigation application that relies on inputs from its users to display realtime traffic, accidents, and even police sightings. The success of this app is totally reliant on the network effect, as its value to each individual user is increased by the number of total users. The more users there are to report traffic conditions, the more accurate and spanning this information becomes, improving everyone’s experience. The article describes the longstanding champion of GPS navigation, Google Maps, as a data network, while Waze is instead a social network. Clearly, this ability to use social networking to improve your product and harness the network effect is important, as Google purchased Waze $1.1 billion.
The article continues by describing more generally the ways in which new super products are built to be “smart and connected” as well as “social.” It cites Instagram, Qualcomm Life, and Nike as some examples of companies building products out of these kinds of social networks. In a competitive market, products need to outdo one another in terms of features and overall quality in order to gain the edge. However, the new growing trend of social products can rely instead on the network effect. The users themselves contribute to the overall quality of the product, and once an edge is gained, it can maintain itself and be very hard to topple by a competing product.
Overall, I found this article very interesting, as social networks have seem to grown into every single type of product. Having studied the power of the network effect in class, it makes sense why so many products seek to utilize it. I am curious to see what else will come from this “age of social products” in the future.