Facebook succeeded through execution and network effects, not invention

Evidence

In business, invention is often said to be overrated as compared with execution. Perhaps the best proof of this idea yet to be offered by the twenty-first century is the success of Facebook, a business with an exceedingly low ratio of invention to success. There is no lightbulb, or telephone, let alone a truly ingenious algorithm in the company’s history. And yet no firm, save Google, has harvested as much attention from the Internet, or commercialized it as effectively. As with Google, that attention would be a by-product of the needs, desires, and efforts of its users. But where Google prevailed by offering the best search, Facebook reached the top thanks to stable code and “network effect”: the phenomenon by which a system of connections grows in value with the number of its users. Zuckerberg understood this from the start. — Tim Wu, The Attention Merchants, 982

Categorization

• DEFINE: Defines ‘network effect’ — the phenomenon by which a system of connections grows in value with the number of its users.
• XREF: Connects to prior chapters’ treatment of Google’s attention harvesting; also echoes Milgrom’s work on network/reputation effects in trading communities. — connects to: Facebook succeeded by remaining a closed platform outside Google’s reach. — Nick Srnicek, Platform Capitalism, 91; Facebook’s growth logic treats any connection-increasing measure as good regardless of harm. — Shoshana Zuboff, The Age of Surveillance Capitalism, 1607; Facebook won by representing existing campus networks rather than creating new ones — Tim Wu, The Attention Merchants, 996 (+1 more)

Broader Connections

• Facebook won by representing existing campus networks rather than creating new ones #corroborates (0.85) — Tim Wu, The Attention Merchants, 996
• Facebook won because Zuckerberg had insider feel for college social dynamics #qualifies (0.75) — Tim Wu, The Attention Merchants, 992