No. 196 · Strategy · General Thinking
Metcalfe’s Law
The value of a network grows much faster than the number of people in it.
In the Almanac
“Metcalfe’s slide”, 1980 · “WeChat”, 2011–2018
Both stories in full, three ways to use it and where it misleads.
Get the AlmanacQuestions
What is Metcalfe’s Law?
Metcalfe's Law, named after Ethernet co-inventor Robert Metcalfe, says a network's value rises roughly with the square of its users. Each new member can connect with everyone already there, so value multiplies rather than adds.
How do you use Metcalfe’s Law?
Use it to choose platforms where your people already are, to invest in tightly connected communities and to become someone who introduces others. Just remember not all links are equal, and big networks can fill with noise.
When does Metcalfe’s Law matter?
Metcalfe’s Law is one of the 56 mental models for strategy, the situations where you ask: How do I win when others want the same thing? Within that, it belongs to “How markets grow and tip”, alongside Crossing the Chasm, First Mover Advantage and Flywheel.
What is an example of Metcalfe’s Law?
Two stories show it at work: Metcalfe’s slide (1980) and WeChat (2011–2018). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.
Which mental models are related to Metcalfe’s Law?
Network Effects, Critical Mass and Dunbar’s Number. Metcalfe’s Law itself comes from general thinking.