The ‘Virtuous Cycles’ of Amazon and Uber
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Networks effects can lead to massive, rapid growth especially if you manage to get a virtuous cycle turning.
Amazon leveraged this model by Jeff Bezos in 2001 for mega growth. Amazon calls it a virtuous cycle (and some call it a virtuous circle). And, more recently, the Uber variation, by David Sacks explains much of Uber’s wild ride. The virtuous cycle is a form of flywheel where once it gets going it keeps on spinning.
When you build a platform that leverages network effects in the right way it can enable growth way beyond what has historically been possible.
Also, see Metcalfe’s Law, the business flywheel, exercise and sleep
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