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Why is network anatomy so important to characterize? Because structure always affects function.

– Steven H. Strogatz

Networks that seek commercial success must develop and maintain the ability not only to change in the face of highly competitive environments, they must also be able to adapt in ways that influence that environment.

– Robert Rycroft

“Everyday inventors don’t let themselves be limited like the rest of us do. They open their minds to the possibilities.”

– Rini Paiva, US National Inventors Hall of Fame

Yet the secret of evolution is the continual emergence of complexity. Simplicity brings a spareness, a grit; it cuts the fat. Yet complexity makes organisms like us possible in the first place.

– W. Brian Arthur

Natural selection may explain the survival of the fittest, but it can not explain the arrival of the fittest.

– Hugo De Vries

Technology System Value

Details

The total value of a technology system can be subdivided into  the sum of the value associated with the technology system itself, independent of the system’s network effects, plus the value associated with the system’s network effects.  the value of the system’s network effects can be further subdivided into the value associated with direct network effects (for which the system’s installed base of users serves as a proxy), plus the value associated with indirect network effects (for which the system’s availability of software/content serves as a proxy). The magnitudes of these various system values to new adopters changes as the system passes through its lifecycle.  The dynamics of these values may be briefly summarized as follows:

technology_system_value

[1]  Technology Value: Technology value is the value of the technology system to users when the system is used alone by the users, without interacting with other users or accessing supplementary content.  Technology value starts out high with innovators and early adopters and decreases as the lifecycle passes through later adopters.

[2]  Direct Value of Installed Base (User Interaction): The direct value of the installed base is the value of the technology system associated with users being able to interact with other users or otherwise share resources.  The direct value of the installed base starts out low with innovators and early adopters, it increases through adoption by the early and/or late majority, then it decreases thereafter.

[3]  Indirect Value of Installed Base (Validation): The indirect value of the installed base is the value of the technology system associated with having early adopters establish that the technology system is worthwhile and meets expectations.  The indirect value of the installed base starts out low with innovators and early adopters, increases through adoption by early adopters, then decreases thereafter.

[4]  Value of Software/Content: The value of software and content is the value of the technology system associated with users being able to access supplementary software/content that enhance the user experience associated with the technology system.  The value of software and content starts out low with adoption by innovators and early adopters, it increases through adoption by the early and/or late majority, then it decreases thereafter.