Imagine it’s the year 1960, and you’re an entrepreneur that’s about to launch the next big thing.
Let’s assume that your product is actually pretty revolutionary, and that you’re going to receive widespread buzz and word-of-mouth traction. How quickly do you think it could be adopted by millions of users?
Before the internet and consumption of digital goods, the use of a product could only spread as fast as you could manufacture the physical good. You would first need many millions of dollars in capital, a plant, a workforce, and inventory. Then, once the product is ready for distribution, you’d need mass advertising, word-of-mouth, sales channels, and press coverage to stand a chance.
Even then, if the product is really revolutionary, you’re looking at a decade or more for it to get widespread adoption.
Automobiles took 62 years to be adopted by 50 million users. The telephone took three years just to be in the homes of 50,000 people.
But these are both physical goods that need raw materials, skilled workers to produce, and economies of scale. They are made of atoms – and atoms must abide by the laws of physics.
In the modern era, you don’t have to produce a physical good. All you need to do is produce a useful piece of code that be replicated or re-used indefinitely at a marginal cost near zero, and it can spread like a wildfire.
As you can see, the transition from physical to digital goods has affected adoption rates, but so has the growing power of network effects.
Metcalfe’s Law states the effect of a network is proportional to the square of the number of connected users of the system (n2).
Within the context above, it simply means that each additional user of a good or service adds additional value to others in that network. New goods or services in the digital realm can harness this network effect to gain users at unprecedented rates. It’s why social media, apps, and the internet were able to take off so quick.
It’s also why the augmented reality game Pokémon Go was able to reach a mind-blowing 50 million users in just 19 days.
And now, with unparalleled connectivity and more than four billion internet users globally, the next big thing could hit that milestone even faster than Pokémon Go. Instead of almost three weeks, it might do so in a few days – or even a few hours.