Seth Godin observed recently that you don’t have to sell the best application in order to succeed and become the dominant player in your market.
Godin calls it the “simple rule for successful online apps.” He says that “technology is nice, but community is the secret.”
Others can copy your technology. Others can copy your original material. It’s hard to develop high-quality technology and it’s hard to create high-quality content, so you’ll never stay ahead of the imitators. They’ll drive your prices down to zero.
What can separate you from the imitators?
Make your app the center of a community. Community creates value because it costs you nothing to add one more member and because it gets better when more people use it.
This applies not just to social software like Facebook and LinkedIn whose primary purpose is to build community. It’s also true of many other applications and websites.
Look at Craigslist. The site hardly has a modern-looking presentation, but the strength of the community of people who use it keep the site vibrant.
It’s easy to think of apps that are at the center of community for consumers or for individuals. But what about B2B applications?
Here are a few examples from Albert Wenger of B2B applications that show strong network effects:
- Kinnek – small businesses request and receive customized quotes from suppliers.
- Sift Science – machine learning fraud-detection services for e-commerce companies
- LinkedIn – business social networking, used heavily by recruiters
- GitHub – web-based Git repository hosting service, offers revision control and source code management
- Salesforce – subscription-based CRM software