On creating networks and “network effects”

Marc Low
December 5, 2018

At its core, Capaciti is a marketplace. Forgive us for stating the obvious, but that means we match supply with demand.

The degree to which we do that well creates utility; utility creates value.

Of course, something has to come before the matching function which creates the utility: the network. Like all platforms, the demand for the network is directly related to the quality and volume of the listings at various price points; imagine Airbnb with only run-down, crappy rentals, or Uber with a pool of unsafe ‘beaters’ - not much demand.

Successful execution creates a kind of virtuous cycle, whereby supply joins the network because there’s value to be extracted, which encourages more clients to transact there because of the increased value in the network, which in turn encourages even more supply, and so on.

Consider Facebook in its’ early days. As just a platform with no members: low value. Zuckerberg and Co. needed to achieve initial critical mass to get the flywheel of users moving. Once it became fashionable to have a profile on “The Facebook” it spread virally across university campuses; by the time your parents wanted to join, it was already a done deal.

Facebook created tremendous value for users because of the size of the network (all your friends were on it, FOMO was high) and the emotional value it created for individuals who participated. This created the supply-side of the marketplace. Advertisers (demand) followed because of the size of the advertising network, the data available for targeting, and the stickiness of Facebook’s network. This has proved a successful model for nearly 15 years, creating one of the largest technology companies in history (recent data issues notwithstanding).

While Capaciti doesn’t aspire to be an open-call social network, similar principles apply.

Our vision is to be the platform for the world’s best technology vendors come to match with clients. As more and more clients learn about the value of the Capaciti network, more and more quality vendors will want to join, which increases demand, which leads to more vendors applying… you get the idea.

We’ve already started spinning the flywheel ourselves, vetting and screening development team vendors for the Capaciti network. We’ve got some of the world’s best technology teams for web, mobile, blockchain and Enterprise SaaS design and development, ready to go, on-demand. That network grows daily, and as the network grows, and more and more clients find value in our network, those network effects will begin to take hold.

It’s an exciting journey that’s only just getting started.

Want to apply to join the Capaciti network? Email: info@capaciti.io

Want to give Capaciti a spin as your on-demand development resource? Click here to start a project.

We’d love to hear from you!

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