The Value Of Networks

Metcalfe's law states that the value of a network is proportional to the square of the number of those involved. The number of unique connections in a network of a number of nodes (n) can be expressed mathematically as n*(n-1)/2. Perversely, the basic tenet of modern organisational theory is how to manage this complexity and structure companies so that as they grow this proliferation of connections is managed effectively.

However, when it comes to the virtual world the more the merrier is usually the case and only when an application focused on participation and involvement reaches a certain critical mass do those involved start to interact effectively. This relates to the fact that although the number of potential connections may be large, the number of relevant connections may be much smaller. Obviously if we are talking about directed connections i.e. you know the number or address of the person you want to 'call' then all is fine and dandy, but much of the success of tools like LinkedIn and FaceBook relates to the ability of the software to facilitate members of the network finding like minded people to interact with and build up connections based on declarative information embedded in profiles. The success of using structured information to facilitate or prompt interactions is a major development over traditional web-based directory listings.

If you also think about the comparison to physical networking - what is the chance of bumping into someone at an event are inversely linked to the paucity of the network, so the focus is to maximise the focus. With online networks the goal is to maximise the number of participants and ensure relevant people find each other using the functionality of the site. With our new resource portal http://www.mydealmaker.co.uk/ we are trying to balance the focus on signing up more users with efforts to improve the functionality of the site so that users find connections of interest as the beta progresses.


By the way, we are looking for participants for focus groups to be held over lunch from 12.30-2.30pm on Wednesday 31st October and Monday 5th November at our offices in Leeds. The aim of this is to help inform our strategy for provision of online services with specific focus on our new opportunities portal http://www.mydealmaker.co.uk/. We realize this is short notice, but if you can spare the time we really would appreciate your input. We promise no homework is involved! If you would like to have your say in a physical way, please email us.