Once You Tip, There’s no Tipping Back
“Network effect” strategy – once you tip the scale, growth is (hopefully) soon to follow. At least that’s what long time platform master Microsoft has experienced and what Market Platform Dynamics,, Managing Director, Andrei Hagiu and assistant professor at Harvard Business School discusses. Hagiu, in a recently published NY Times article talks about “network effects” strategy and says, “As the Windows example shows, once a market with network effects tips to one dominant platform, then it is very hard to tip back.” But Hagiu goes on to say, “But network effects alone don’t necessarily produce tipping… Users must also perceive a high switching cost —in this case, in time and inconvenience — if they were to move to another social networking site [other than Facebook].”
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