indirect network effects

Indirect network effects occur when the value of a product or service increases not just because more people are using it, but because its ecosystem—such as complementary products or services—grows. For instance, as more people use a particular smartphone, app developers are incentivized to create more applications for that smartphone, enhancing its appeal. This, in turn, attracts even more users, creating a positive feedback loop. In summary, the overall value of a platform grows as the community around it expands, benefiting both users and developers.