1980
Robert Metcalfe states Metcalfe's Law
EthernetA wired local networking standard — the dominant way offices and homes connect devices to a LAN. inventor Robert Metcalfe articulates why network effects compound — each new user makes the network more valuable for everyone else.
Quote
“The value of a telecommunications network is proportional to the square of the number of connected users of the system.”
What it was for
Metcalfe's Law became the mental model behind social networks, marketplaces, and platform economics. Critics note n² oversimplifies real networks, but the core insight — connectivity has nonlinear returns — still shapes startup pitch decks.
People
- Robert Metcalfe — researcher
Why it's here
The formula behind 'network effects' before the phrase existed.
Why it mattered
It explained why winning platforms could pull away from rivals with similar features.
What it solved
Investors and engineers lacked vocabulary for why connected products accelerate in value.
Media
ImageRobert MetcalfeAndreu Veà, WiWiW.org, CC BY-SA 3.0, via Wikimedia Commons