In summary, the article argues that some platforms, such as Uber, benefit far less than others (such as Amazon, AirBnB) from network effects due to the fact that their userbases are clustered over multiple locations :
> Drivers in Boston care mostly about the number of riders in Boston, and riders in Boston care mostly about drivers in Boston. Except for frequent travelers, no one in Boston cares much about the number of drivers and riders in, say, San Francisco. This makes it easy for another ride-sharing service to reach critical mass in a local market and take off through a differentiated offer such as a lower price.
The article raises others points and is quite an interesting read in itself. Strongly recommended.
I'm not sure this is the main cause, but it's an interesting point of view.
For Amazon, their Network effect is huge because they have a huge delivery and storage facility network. The barrier to entry is huge.
For Airbnb, it might be closer to what this article is saying. But also it's less convenient for home owners to have their location on multiple sites (need to sync calendars, the subscription takes much longer...). So they pick one, which is Airbnb.
In summary, the article argues that some platforms, such as Uber, benefit far less than others (such as Amazon, AirBnB) from network effects due to the fact that their userbases are clustered over multiple locations :
> Drivers in Boston care mostly about the number of riders in Boston, and riders in Boston care mostly about drivers in Boston. Except for frequent travelers, no one in Boston cares much about the number of drivers and riders in, say, San Francisco. This makes it easy for another ride-sharing service to reach critical mass in a local market and take off through a differentiated offer such as a lower price.
The article raises others points and is quite an interesting read in itself. Strongly recommended.