Network effects

A product that becomes more valuable to each user as more people use it, which makes the leading position self-reinforcing.

Exchanges, payment networks and marketplaces are the classic examples, and the strength of the effect varies enormously. A global network where every user values every other is very strong; a local one, such as food delivery in a single city, has to be won market by market and can be attacked market by market.

Multi-homing weakens it. Where users happily keep two applications, neither network locks anyone in, which is why several Indian consumer platforms have burned capital for years without ever reaching the defensibility the model promised.

Ask whether a user could leave and still get what they came for.