Value Curves

Social Media Value Curve
Here is a handy little diagram I made after I listened to the Marketing Monger podcast interview with Stan James of Outfoxed and I checked out this post on the Outfoxed blog. The more users you have in a social network, the better, but only until a certain point. This can be called the Social Network Value Curve. The Tipping Point into uselessness?

Kathy Sierra wrote about the same curve regarding number of feature/value in software, aka “featuritis” (this could even be applied consumer electronics, or government, many things). She tries hard to not point to the the 37 Signals “less is more” mantra. I’m not sure if this is a standard deviation type of curve, but it looks like we have something here. I am sure there is already a ton of research on this, I just don’t know what name it goes by.

It’s the The Law of Diminishing Returns, right?

The Diffusion Group writes about the rise of social networks, and mentions Metcalfe’s Law:

a network only has value if the value of the system is proportionate to the number of the users of the system (i.e. “friends”) squared.

So what do you call it where Metcalf’s Law meets The Law of Diminishing Returns?

Update 8/18/2006
Om Malik interviews Bob Metcalf on this topic at the Om and Naill Podsessions podcast. Bob says that Metcalf’s Law moves up to a higher order, and keeps moving up to increase value. There is a network within a network within a network.

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One Response to Value Curves

  1. Pingback: n.sputnik/Nick Dynice » Blog Archive » Metcalfe’s Law 2.0 is Web 2.0

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