YakShaving

I’ve just recently discovered Nir Eyal’s blog, Nir & Far, and I really appreciate his astute point of view on internet startups and getting to a network effect.

Secrets people can’t or don’t want to divulge are a common thread behind Thiel’s most lucrative investments such as Facebook and LinkedIn, as well as several other breakout companies of the past decade. The kinds of truths Thiel discusses — the kinds that create billion dollar businesses in just a few years — are not held exclusively by those with deep corporate pockets. In fact, the person most likely to build the next great tech business will likely be a scrappy entrepreneur with a big dream, a sharp mind, and a valuable secret.

But today, as software continues to eat the world, service industries are being upended by upstarts. A new crop of companies like AirBnB, DropBox, and Square exploits secrets gleaned not from industrial design, but from interaction and systems design. These companies remedy old problems by designing interfaces to create new user behaviors.

Change the Interface, Change the World

Whenever a massive change occurs in the way people interact with technology, expect to find plenty of secrets ripe for harvesting. Changes in interface suddenly make all sorts of behaviors easier. Subsequently, when the effort required to accomplish an action decreases, usage tends to explode.

Though we’re living through an age when new insights about user behavior abound, the methods for building a long-term business advantage has narrowed. The kind of secrets that build big businesses today must support a plan to build a network effect business. Without a network effect strategy, secrets don’t stay valuable for long.

Respond to me on Twitter: @AshBhoopathy or follow the discussion on HN.