This is an old note that I wrote after listening to a podcast discussing this idea. I never uploaded it but thought it might be interesting to revisit.
Entrepreneurs, investors, academics and reporters seem fascinated with this concept of network effects. Uber, Airbnb, Spotify, Facebook, Google among many others are cited as the prime examples of a phenomenon that seemed to take the business world by surprise. Although network effects is nothing new, the behavior of systems that have network effects keep amazing everyone. This essay is by no means an intro to network effects. There are a lot of resources that can explain it better. The purpose of this essay is to share this fun idea that I heard the other day in the A16Z podcast that the English language is perhaps the oldest and strongest system with a network effect.
Think about it for a second. The reason why most of us (non-native English speakers) learn English is to understand and be understood by others. The English language has network effects because, among other things, having one extra person in the network (someone that can speak English) makes the network more useful to everyone else. How? First, for every extra person that knows English you have one potential extra person that you can communicate with. If you knew English but no body else did that wouldn’t be useful. It is precisely because so many people speak English that more people learn English!
Many people use landline phones as an example of a technology with strong network effects and in a sense the English language is similar to phones. In the beginning not many people had phones in their homes because they had nobody else that they could talk to. Thus, few people bought phones because there were few people they could talk to and few people used phones because not many had phones. This is usually referred to as the chicken and egg problem. However, once the install base of phones reached critical mass and the chicken and the egg problem was solved people benefitted a lot from having phones in their homes because with every new person that got a phone they could reach one more person. Similarly with English with every additional person that speaks the language you have one more person to talk to.
A second way in which the English language consolidates itself through network effects is through the production of media (i.e. books, movies, songs, etc.). If the most relevant or engaging content in the world is created in English then you are more likely to learn English to engage with that content. Furthermore, if you decide to respond to that content you’re more likely to do so in English. For example, if you want to learn about cool new ideas you might decide to watch TED Talks on Youtube. The problem is that most of these talks are in English. Thus, in order to consume that content and derive value you need to learn and understand English. Now lets assume that you spend 5+ years learning English to understand this one TED Talk and lets say that you liked it so much that you want to leave a comment expressing your thoughts. In order to get your point across to the people that watched that TED Talk you will have to leave a comment in English. The point is that you will keep engaging in English because that’s where all the interesting content and conversations are and by continually engaging in English you will create more interesting content and conversations in English, which completes the cycle.
I think this is a very interesting idea that can definitely be explored more in-depth. Nevertheless, I think it’s worth putting out there because it’s a new and interesting way for me to approach this idea of network effects.