Network effects occur when a product becomes more valuable as more people use it. Direct effects come from more of the *same* users; indirect effects come from different user groups (e.g., developers building on a platform).
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How do SaaS platforms leverage indirect network effects?
By building an app marketplace (like Shopify or Zendesk), the platform becomes more valuable to customers because there are more apps, and more valuable to developers because there are more customers.
Knowledge Challenge
Mastered Direct vs. Indirect Network Effects? Now try to guess the related 6-letter word!
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