Hi everyone, welcome to the A6 and Z podcast. I'm Sonal. Today's episode closes out our special series on

network effects. You can find the other pieces at OnA6inZ.com. And we're wrapping up by talking about

the taxonomy and types and evolution of network effects. Joining us for that conversation is James Currier,

who's a co-founder and managing partner of NFX Guild,

which is an early stage accelerator that runs a program for companies with network effects,

which can range with all kinds of businesses. Also joining us for that conversation is A6NZ

partner, Anu Hari Hearn. And we kick off this conversation, which was recorded months ago,

talking about the history and

evolution of network effects before we break down the taxonomy of network effects and why all network

effects aren't equal and why the language for figuring out the differences between them matters.

The first time it was used was 1907 in an annual report by AT&T. And they started noticing that because

they had a lot of people connected to the telephone network, other people wanted to connect to

the network and that each of their customers got happier when they got a new customer, because

they could now call more people. And they said, because of that effect, AT&T said,

I think we have a pretty good business here.

And that was the first time someone coined the term network effects.

Okay, because the first time I heard about it was, I think,

when it came to the coinage of Metcalfe's law.

Correct. Yeah. So that was during the Internet era, right?

I think there was a gap between when AT&T used it in their annual report and then Ethernet cards came into practice. If you look at Ethernet card, it's interesting to note, actually, network effects began with hardware. It was first the telephone, then the internet, and in today's world, we talk about it in the context of software companies

like Facebook. So Metcalf's law, an Ethernet card, the way it came about is the cost of the

printer is really high. And so the Ethernet card actually enabled various people to connect

...