4 rules I used in my startup to leverage on the networked economy

The new networked economy requires new rules. As a startup in this new economy, I constantly looking for ways for my company to be part of the network. Here are the 4 rules of thumbs I always used to ensure that what I do leverages fully on the networked economy

Many touch points
I want my service to touch as many networks as possible because the value increases exponentially by the number of networks the action flows through. In practice, this means open APIs and confirming to open standards such as microformats and Open ID/Facebook Connect. The aim is to make it as easy as possible for my service to get in and out.

Tapping/Coordinating existing networks
Rather than creating new networks, I am always on the lookout for ways to leverage on current networks. More significantly, if my service can help to coordinate or bridge different networks, the value is even greater . Take the simple example of commenting systems like Disqus. It rides on the blogging networks to scale its users. However, because it works across different blogging networks, from blogger to Wordpress, the value it creates becomes much more significant.

How to benefit others
Networks become more powerful when more value is flowing through them. Hence, I would want third party developers or suppliers to come aboard my service and create new things using it. Therefore, thinking about ways to create benefits for network members is actually very productive. This cannot be accomplish by simply having an open API. I need to consider pricing tools, ability to collect payment, how to surface and promote the best third party services etc. Such support structures must be there to truly benefit other members.

Feedback LoopsThere is a viral effect for networks. I want to create high viral coefficients so that my service can spread itself faster. Conversely, I want to be aware of negative feedback loops as well so that it doesn't dampen my growth. One important factor here is the fees. Rather than charge as high as you can, Tom Evslin famously said that networks should charge as low as they can bear to maximise growth. Pricing in this case is an important viral factor.

These are my rules of thumbs. I watch for these in many of the startups we funded. Do you have any rules of thumbs to leverage on network growth?

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Posted in: network,Singapore startup environment