Ep 8: Your Life Is Driven By Network Effects (NFX Masterclass)

SPEAKER_1 (0:00)

You're listening to episode 8 on Network Effects in Your Life from The Network Effects Masterclass here on The NFX Podcast. This episode outlines how we see network effects impacting nearly every aspect of our life. And through that lens, it lays out a perspective on how to make the seven most important decisions of your life. Our networks are our most valuable resource, and this episode will hopefully help you make decisions that are more true to the kind of life you want to lead.

James Currier (0:25)

Your education about network effects, however, will not be complete without this section. And this section is not just about your startup. It's actually about your life and about the life of everyone you know. And as such, this is the section you should share with other people, even if they're not startup founders. We've been working with founders building these network effect businesses for a few decades now. We've seen how they work, what the forces are, what the math is. And we started to notice the same pattern showing up not just in startups and growing businesses, but in people's lives. Pretty much everywhere we looked, the same patterns were showing up. And so we started to dig in and realized that while we seem in control of our own lives, we're actually much less so than we think. There's an unseen hand at work, and that's a network force. Just like the network forces, the unseen hand that makes the giant companies giant. And I want to walk you through what we've seen so that you can understand the impact on your life and how it affects you and the people around you, so that you can better navigate and choose where to go within the network and play with the network force, use the network force or fight against it to try to drive your life to where you want it to be, give you more options.

So you are being driven by these unseen mathematical principles. But well, let's talk about your life in specific. So consider yourself a node in the network of people. Okay. You're in a particular city, you're on a particular social network. You are connected to other nodes, hundreds of them, thousands of them. And there's links between each of you. And on those links travel a whole bunch of things. So let me give you a list of some of the things that you might not have thought of actually travel between you and other nodes. So ideas or capital, right? Money, you can exchange money. Connections, you can share a connection you have with them. Jobs are shared. Status is shared. You know, you were invited to a party. Aspirations are shared. You know, if you share your aspirations in your dreams, monkeys see, monkey do, right? Other people will start to think like you do about what they should be doing with their life. Language is shared. You know, if I use a word like Web3 instead of crypto, then you might start saying Web3 instead of crypto. This is how language evolves. Requests are shared. Standards like standards of cleanliness or standards of how close you stand to someone. That really differs between cultures. Expectations are shared. What you expect of each other, what you expect of life. Affirmation, you give each other affirmation. You share belonging. You might share real estate. Someone can come and stay in your apartment. So, so many things are shared between these nodes that you think it's just sort of living, but these are actual mathematical values that are being shared that cause you to decide to move to Cleveland or to move to Seattle or what to do with your life, or which job to take, or which school to go to, or who to marry, right? It's all in the interactions. It's almost as if you're walking around with a dashboard in front of your face, giving you data, and you feel like you're in control, right? You feel like you have free will, and you're making your own decisions, and you are. But you're making those decisions based on whatever data is in front of you on your dashboard. Who's putting that information on your dashboard? Your network. The network you were born into or that you moved to. Who you work with, who you went to school with. They're the ones putting that data on your network, and then you make the best decision you can at that moment. So what we've seen is that there's about seven crucible moments in your life where you're shifting networks, and therefore you're shifting what's going to be put on your dashboard and thus shifting where your life is going to go. And so if you can more consciously make the decisions about which networks to choose as you move through life, you will actually be impacting what data you're getting on your dashboard, and therefore your decisions and how your life ultimately ends up. And the spooky math actually extends to a much more tangible example, like how many people you have at a dinner party. If you have six people at a dinner party, it feels one way. As soon as you get to eight or 10, it's a very different dinner party. So most dinner parties end up being about six, because it's based on how many one-on-one conversations, how many links between the nodes you can have at the dinner table. There's actually a formula that you can use that actually allows you to see how social interactions play out, and you're just walking through your day thinking you're just being a human and talking. But in fact, there's math driving how all those interactions take place. It's crazy, right?