TL;DR:

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Network effects aren’t just for consumer tech. B2B and industrial startups can build them too by:

• Understanding direct vs indirect network effects
• Designing multi-sided platforms with buyers and sellers
• Leveraging existing users to improve product value
• Using data to create self-reinforcing product loops
• Encouraging integrations and platform ecosystems

The result? A competitive advantage that grows stronger as the network grows.

When we think of network effects, we often think of consumer-facing giants like Facebook, Uber, or Airbnb. But what about the startups building behind the scenes—those in B2B SaaS, industrial platforms, manufacturing tech, or enterprise infrastructure?

Good news: network effects aren’t just for consumer apps. With the right strategy, non-consumer startups can create powerful, defensible ecosystems too. Let’s break down how, with examples, strategies, and ideas you can put to work.

What Are Network Effects?

At its core, a network effect occurs when a product or service becomes more valuable as more people use it. Think of how more drivers and riders make Uber better, or how more buyers and sellers make eBay a stronger marketplace.

But that’s not the only model. In B2B and industrial contexts, network effects barriers to entry can look different—but they’re just as effective.

Types of Network Effects

There are several types of network effects, and understanding which one applies to your business is the first step.

• Direct network effects: Each new user adds value to the rest of the network. For example, in Slack, more users make the tool more useful for communication.
• Indirect network effects: The value of one group of users grows because of another group’s activity. Think about buyers and sellers on a B2B marketplace—more sellers attract more buyers, and vice versa.
• Data network effects: The product improves as more users contribute data. AI-based B2B tools often benefit from this.
• Platform or ecosystem effects: As more partners, tools, or integrations are added, the value of the platform increases. This is common in industrial software and SaaS.

How to Build Network Effects in Non-Consumer Startups

You don’t need millions of daily users to benefit from a network that grows dynamically. Here’s how B2B and industrial founders can intentionally build network effects into their product strategy.

1. Start With an Ecosystem Mindset

Even if your product serves a single customer, think about how it interacts with others in the value chain. Does your software help suppliers communicate with buyers? Do your analytics tools improve with more data from existing users?

Build features that encourage interaction across teams, departments, or companies—not just single-player use.

2. Build a Two-Sided or Multi-Sided Network

Many non-consumer startups are natural candidates for two-sided platforms. This includes:

• Procurement systems connecting buyers and sellers
• Industrial marketplaces for parts, services, or logistics
• Platforms that connect OEMs and service providers

Design your onboarding and incentives to grow both sides of the network simultaneously.

3. Leverage Data for Value Loops

Network effects examples in AI or industrial automation often involve data loops. The more your users engage, the smarter your product gets.

For instance, an industrial IoT platform can use sensor data from one customer to improve predictive maintenance algorithms for others. This makes each new customer increase the value for the entire network.

4. Encourage Integrations and Partnerships

One of the strongest types of network effects for enterprise startups is platform extensibility. If your tool becomes the central hub that others build around, you’ve created indirect network effects through integrations.

Think of how Salesforce’s AppExchange or AWS’s partner ecosystem adds value to every customer as it grows.

5. Don’t Forget Trust and Switching Costs

B2B network effects often hinge on trust. When your platform becomes a trusted environment where businesses interact, switching becomes harder.

Encourage reviews, case studies, and referrals. These social proofs amplify the value of your existing users and build trust among newcomers.

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Direct vs Indirect Network Effects in Practice

Let’s say you’re building a quality control platform for manufacturers:

• If each factory that joins makes it easier for others to share benchmarks or learn best practices, that’s a direct network effect.
• If more manufacturers attract more tooling vendors or certification bodies to the platform, that’s an indirect network effect.

Understanding direct vs indirect network effects helps you design features, partnerships, and user flows that unlock growth.

The Bottom Line

Network effects aren’t reserved for social media giants. Even the most technical, behind-the-scenes B2B or industrial startup can create them—with the right mindset and product design.

By identifying your unique types of network, investing in multi-sided value, and using customer activity to drive improvements, you’ll create a system where the network grows with every new user.

So if you're a non-consumer founder asking, "What are network effects, and do they apply to me?"—the answer is a clear yes. Build with the network in mind, and your startup won’t just grow—it’ll accelerate.

Join Gravitate today!

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