How an upstart node, whether it is a new venture in the business world, a new genius in the academic world, a non-governmental organization, a political initiative or a sports team, can increase the probability of attracting more connections.
In the first part of this article, we explained that in network systems such as social networks, the internet, society, protein interaction networks, paper citation networks, and ecological networks, newly joined elements (we will call them nodes) often prefer to connect with those who already have more connections, i.e. favoring the connection rich. This phenomenon is known as 'preferred attachment', or the Barabási-Albert model. If you haven't read the first article, I suggest you do so at this link before continuing.
The preferred attachment causes these rich nodes to gain even more connections, widening the gap with other nodes. We can observe this behavior in social, molecular, electronic, economic and financial networks.
But don’t the connection-poor fresh nodes that enter later have a chance? What can be done about it or how can the fate of a poor node in the system change?
Frequency distributions are probability distributions, i.e. they show how likely things are to happen given the information we have. They are about trends, not the pre-designed functions of the cogs of a machine. 'Preferential attachment' then means that those with more connections are more likely to be preferred.
Now, we will look at how an upstart node, whether it is a new venture in the business world, a new genius in the academic world, a non-governmental organization, a political initiative or a sports team, can increase the probability of attracting more connections, and if we are responsible for the strategy of this venture, what strategies can increase this probability and what actions can we avoid to prevent the probability from decreasing [1].
Surviving Preferential Attachment Loops
Preferential attachment, as the definition suggests, can lead to cycles that are hard to break. If startups continue to follow established patterns instead of exploring new breakthroughs, it is difficult to break out of them. However, there are strategies - some obvious, some less obvious - to break out of these cycles and increase the likelihood of success.
Based on extensive research and data analysis, Albert-László Barabási has identified five universal laws that underpin successful outcomes [2]. Let’s start with these.
"Performance Drives Success, But When Performance Can't Be Measured, Networks Drive Success."
In scenarios where performance can be objectively measured, such as in sports, sales or certain technical fields, success is primarily driven by performance metrics. For example, athletes might be judged on their performance in competitions, salespeople on their sales volume, and programmers on the quality and efficiency of the code they write. Better performing individuals or organizations naturally rise to the top due to superior performance metrics. Success in these areas is strongly associated with measurable gains and outcomes.
In many fields, however, especially those involving creativity, leadership or research, performance is more subjective and harder to measure. Examples include art, literature, music, academia and business leadership. In these cases, social networks and connections become crucial. Recognition and success often depend on who you know and who knows you. Effective endorsements, recommendations and collaborations significantly influence an individual's success.
In academia, the impact of a research paper may depend heavily on citations from leading academics. In the art world, an artist's success may depend on exhibiting in a prestigious gallery or being endorsed by influential critics.
In fields where performance is subjective, it is important to build and maintain strong connections. New initiatives can gain initial momentum through synergistic collaboration with or support from established players. This can help them quickly gain visibility and connections.
When Spotify launched, it faced competition from established music platforms. To enter the market, Spotify partnered with Facebook in 2011, integrating its service with the social media giant. This integration allowed users to share their listening habits on Facebook, significantly increasing Spotify's visibility and user base.
Rather than relying on established connections, looking for new forms of connectivity or new partnerships and collaborators across different networks can bring new perspectives and ideas. This can be particularly effective in rapidly evolving industries where it is crucial to stay one step ahead.
Dropbox has used referrals to grow its user base. Existing users were incentivized to refer new users by being given additional storage space for each successful referral. This strategy leveraged network dynamics to drive rapid user growth through word-of-mouth and personal referrals.
However, relying too much on a single endorsement or collaboration can be addictive and limit long-term growth when the partnership ends or the backer's influence wanes.
BlackBerry's over-reliance on major telecom operators, especially Verizon, for distribution and marketing in the early 2000s led to its downfall as these carriers began to introduce competing devices. This dependency has limited BlackBerry's market reach and slowed its ability to respond to consumers' rapid shift toward touchscreen smartphones and app ecosystems offered by Apple and Android. The binding influence of operators on product decisions further hampered BlackBerry's ability to innovate and led to a dramatic decline in market share. Ultimately, BlackBerry's inability to diversify its partnerships and adapt to changing market dynamics resulted in its exit from the smartphone manufacturing business.
"Performance is Bounded, But Success is Unbounded."
Performance is often limited by intrinsic factors such as physical abilities, resources, time, and skills. The conditions of individuals, organizations, societies, molecules limit them. The environment, financial and other resources and technology of a business enterprise can limit the performance it can achieve.
Yet success isn't just about internal performance. It's also about how performance is perceived and evaluated by others. Influence, reputation, and social networks can drive success beyond actual levels of performance.
In areas such as entertainment, sports, and business, market dynamics can lead to disproportionate successes. A small difference in performance can result in a big difference in success due to factors such as media coverage, public interest, and market demand.
To achieve unlimited success, individuals and organizations must focus on building a good reputation, leveraging social networks, and improving perception of their performance. Effective branding and public relations can increase success.
A well-executed marketing strategy can help new startups build a strong brand presence, attract attention, and develop connections.
Warby Parker entered the online eyewear market with a direct-to-consumer model, offering stylish, affordable eyewear. Their strong branding, combined with innovative marketing campaigns and socially themed modeling (such as donating a pair of glasses for every pair of glasses sold), resonated with consumers. This, in turn, helped them quickly build a loyal customer base and gain market share from established brick-and-mortar retailers.
It may not be enough just to determine your own strategy. Failure to fully understand and anticipate the actions of competitors can end badly.
In the 1990s, Netscape Navigator was the pioneering leader in web browsers, but Netscape failed to anticipate Microsoft's competitive response. The fact that Internet Explorer was included with Windows for free wiped-out Netscape.
It is crucial to identify and exploit opportunities that can create positive feedback loops. This can include strategic partnerships, media engagements, and leveraging early successes to encourage further growth and recognition.
Understanding market dynamics and timing can help position oneself or a product for unlimited success. This includes being in the right place at the right time and making strategic decisions that align with market trends. New startups can look out for and take advantage of external events or market shifts that make their offerings more attractive or necessary.
Zoom has benefited from the sudden shift to remote work during the COVID-19 pandemic. While video conferencing is not new, Zoom's ease of use, reliability, and timely response to growing demand have enabled it to quickly become the go-to platform for businesses, educational institutions, and individuals, surpassing more established competitors such as Skype.
However, misreading market trends or starting with morally questionable inferences from them potentially ends badly.
Founded in 2013, Juicero aimed to revolutionize home juicing with a high-tech, Wi-Fi-enabled juicer and subscription-based chopped fruit packs. Capitalizing on the health and wellness trend, Juicero has attracted over $120 million in venture capital. However, the $699 device was over-engineered and overpriced, especially when it was revealed that the juice packs could be squeezed by hand, producing the same results without the machine. This undermined the product's core value proposition and led to public backlash. Juicero's failure to deliver meaningful innovation resulted in its shutdown in 2017, illustrating the risks of overhyping products without genuine consumer benefits.
One of the pitfalls of timing may be to switch too early, that is, untimely growth. Fast expansion without building a solid operational foundation can lead to logistical challenges, quality issues, and financial instability.
Webvan, an online grocery delivery service, has expanded very quickly in the U.S. without building a strong operational base. It went bankrupt in 2001 due to high costs and logistical difficulties.
"Previous Success x Fitness = Future Success"
Previous successes can have a compounding effect, leading to more opportunities, resources, and recognition, further enhancing subsequent successes. This, in turn, can create a positive feedback loop, making success potentially limitless. So, the first success and its impact are important.
Fitness, on the other hand, represents intrinsic qualities, abilities, or competencies that contribute to success, such as skills, talents, innovation, work ethic, and adaptability to changing situations.
Future achievements are not just the sum of previous achievements and fitness, both components interact with each other in a non-linear way to create a much bigger impact.
It should not be forgotten that if one of these is not enough, this multiplier effect will reduce the probability of success.
Initially disrupting the home video rental market with its subscription-based DVD-by-mail service, Netflix took a significant and innovative risk in 2007 by moving to online streaming, which required a significant technological investment. Using this second success, Netflix developed further by producing original content starting in 2013, thus becoming a content creator. Despite facing intense competition and financial risks, Netflix's data-driven approach and bold strategies have fundamentally reshaped the entertainment industry, with more than 230 million subscribers and numerous award-winning original shows.
New ventures should focus on developing their intrinsic qualities that contribute to long-term success while also considering creating a good track record with early success gains. For these early successes, realistic and doable milestones should be established. They need to consider organizational capacity development to ensure fitness. Also, they should strategically communicate past successes and use them to seize more opportunities.
"While Team Success Requires Diversity and Balance, a Single Individual Receives Credit for the Group’s Achievements."
Teams benefit from diverse skills and balanced contributions, yet credit often goes to one prominent individual.
However, teamwork can achieve success beyond that individual alone. Different members bring different perspectives, skills, and experiences; This, in turn, can lead to more innovative solutions and better decision-making processes.
In new business ventures, having a mix of technical, financial, marketing, and operational skills within the team is essential to overcome the various challenges that may arise.
Diverse teams are often better at adapting to changing situations, as they can draw on a wider range of experiences and perspectives to deal with uncertainties and changes
In new ventures, the founder or CEO often becomes the face of the company. This can lead to the perception that they are solely responsible for the company's success, which can overshadow the contributions of the entire team. Media and investors tend to focus on charismatic leaders and compelling narratives.
Again, founders often play a central role in fundraising and networking, further raising their profile and closely linking them to the startup's successes. These are risks that cannot be ignored.
Adam Neumann co-founded WeWork with a vision to revolutionize shared workspaces, rapidly expanding the company to a $47 billion valuation. However, Neumann's erratic behavior, lavish personal spending, and grandiose visions led to a disastrous IPO attempt in 2019, revealing financial instability and poor business practices. Investor and employee concerns culminated in Neumann's ousting, massive layoffs, and significant restructuring, showcasing the perils of founder syndrome where a single leader's unchecked influence can jeopardize a startup's success.
Whereas founders and leaders can make a conscious effort to publicly communicate and celebrate the contributions of their team members. Fostering an inclusive leadership culture where all team members feel valued and recognized can boost morale and motivation and lead to improved overall performance.
Distributing leadership roles within the team, such as co-founders with complementary skills, can help ensure that the contributions of different team members are recognized.
Stewart Butterfield, co-founder and CEO of Slack, has embraced a leadership style that prioritizes collaboration, diversity, and a transparent company culture. By emphasizing contributions from the entire team, Butterfield fostered an inclusive environment by breaking down silos within the organization. Butterfield's leadership demonstrates how diverse and balanced leadership can drive sustainable success and adaptability in start-ups.
"With Persistence, Success Can Come at Any Time."
Despite challenges, failures, or slow progress, persistence increases the chances of success through consistent pursuit of goals over time. The efforts and experiences accumulated over time and the knowledge obtained can turn the odds in your favor if used correctly without giving up.
Understanding that success can come at any time allows you to stay focused and motivated on the big picture and long-term goals. Understanding this also requires the ability to recover from challenges and adapt to changing circumstances. It allows you to change or develop strategies in the face of difficulties and maintain commitment to the goal in any situation.
Persistent efforts must be combined with a commitment to continuous learning and development. Over time, valuable experiences, lessons, and networking connections accumulate that can be leveraged for future success. Each failure or setback can offer insights that may result in better strategies and decisions going forward.
To maintain these efforts, breaking down long-term goals into smaller, manageable ones can provide a sense of progress and motivation. Celebrating small wins along the way helps maintain permanence.
Collecting and analyzing data from each experience and realistic interpretations and inferences are perhaps more important for startups than brilliant ideas. Instead of following rumors, popular flare-ups or sentiment, monitoring and analyzing data as widely as possible can lead to decisions based on more objective criteria. It is important to monitor and analyze the data of both your own and external sources, and to take them into account when making decisions.
Founded in 2008, Airbnb used data analytics to disrupt the hospitality industry, which was dominated by established hotel chains. By analyzing user behavior, implementing dynamic pricing, providing personalized recommendations, strategically expanding into new markets, and enhancing trust and safety measures through data insights, Airbnb has adapted its platform to meet user needs and attract a diverse user base. This strategic use of data has helped Airbnb break the cycle of preferential attachment and has led to its growth and success as a global hospitality leader.
But on the other side of the coin, questioning data analysis, the validity of the data and assumptions used, and not over-trusting can prevent us from falling into a trap.
Zillow's over-reliance on its algorithm for property valuations, which entered the online real estate market in 2006, highlights the significant pitfalls of over-reliance on data analysis. The algorithm did not consider local market nuances and fluctuations, generating inaccurate values, leading to user dissatisfaction, legal challenges, and reputational damage.
General Concerns
Apart from these items in Barabási's success formula, I would like to add a couple of issues that may be obvious.
At the top of these is true innovation. When I say innovation, I don't mean "innovation" in the sense that is in everyone's mouth these days. True innovation means breaking existing patterns and replacing them with new ones, initiating a paradigm shift. Otherwise, adapting something that has been done elsewhere or making small contributions to it may not be innovation, but adaptation and incremental development at best.
Even in this sense, being innovative alone may not be enough. This needs to go hand in hand with risk-taking. A situation where you will only take risks yourself may not be enough. It may be necessary to have a risk-taking culture and ecosystem. I have been in discussions in different places where wishes of "let's build a Silicon Valley here" were flying around. But in none of these places did the legal or financial system resemble the real Silicon Valley ecosystem.
Sometimes, innovation can disrupt the existing system. Companies like Airbnb and Uber have acted with a game-changing mindset by challenging the status quo and creating entirely new business models. While Airbnb's home-sharing concept has disrupted the traditional hotel industry, Uber's ride-sharing model has transformed urban transportation. These companies have not only improved existing services; they redefined them.
However, if innovation and risk-taking focus only on innovation, technology or bright ideas and ignore the real needs and perceptions of the (potential) customer, this may become a trap and may not be effective.
Google Glass was an innovative product with high-quality technology, but it ignored privacy concerns and practical user feedback. Ignoring these aspects led to poor market adoption and ultimately to the discontinuation of the project for consumers.
However, Amazon's rise from an online bookstore to a global e-commerce giant can be attributed to its customer-centric approach. Focusing on customer needs and satisfaction, Amazon has expanded its offerings and has been able to move away from the online seller mold. Its customer-centric approach has also led to innovations such as Amazon Prime, which has revolutionized expectations for delivery services.
There are situations where you may have only one shot. Years ago, a chef I knew said about cooking, "If garbage goes into the kitchen, garbage comes out". In other words, if the material is bad, you should not expect to be very successful. Any service, product, policy, strategy, whatever it is you make, if not good, will become the anchor that pulls you down. If this is reflected in your target audience, your chances are even less.
Samsung's Galaxy Note 7 suffered from significant usability issues, including exploding batteries. Poor user experience and security concerns led to a costly global recall and damage to Samsung's reputation.
Samsung may have the financial and marketing power to afford it, but if you're at the beginning of the business, you're likely to lose it altogether.
Likewise, ignoring established legal or cultural norms or sensitivities can lead to backlash. An example of this is the legal problems and cultural problems that Uber is experiencing in various countries. Again, Facebook's failure to show sufficient sensitivity in time about the disclosure of people's private data caused a loss of reputation and therefore revenue.
From Zero to the Top
The "zero-to-hero" phenomenon, in which a person or institution quickly rises from obscurity to fame, can be explained within the framework of the Barabási-Albert model and the concept of preferential attachment, but with some additional considerations.
The preferential bonding model says that nodes with more connections are more likely to attract new connections. However, the "zero-to-hero" effect suggests that it may be possible for a relatively unknown node to suddenly become highly connected and influential. Let me stress again that both are based on probability. But at first glance, these two may seem irreconcilable. However, within the framework of the Barabasi-Albert model, there are several factors that can explain and facilitate this rapid rise.
Collaborating with already established and influential organizations can provide significant visibility and credibility. The support of well-known people or organizations can quickly increase the visibility and perceived value of the new entrant.
Timing, value proposition, and unique offering of whatever product, service, policy, program you offer can provide you with this rocket thrust. Especially in terms of timing, a gap or crisis in the environment (think of dark horse politicians) can put even the weakest candidate on top if exploited correctly.
The strategies that we discussed in this article will help take zero to the top if the planets are aligned correctly and all used well. It is also worth adding being in the right place at the right time is a factor.
TikTok's rapid rise from obscurity to global prominence exemplifies the zero-to-hero phenomenon within the Barabasi-Albert model. Initially gaining traction through the acquisition of Musical.ly and leveraging influencers for promotion, TikTok differentiated itself with its unique, engaging short-form video content and powerful editing tools. The app's design fostered viral growth through algorithmic content recommendations on the "For You" page, significantly increasing user engagement. Additionally, TikTok capitalized on the growing trend of mobile entertainment and short videos, aligning with market demand, while its data-driven strategies continuously optimized user experience. These factors collectively propelled TikTok to become a leading social media platform.
As you can see, a node that has just joined the network can not only meet certain conditions, but also have a better chance of joining the multi-connected with the right strategies and the right steps. Although those who come out on top in this probability raising game dazzle and increase enthusiasm, it should not be forgotten that we do not even have a chance to hear the name of many of them due to the model. Considering the age of the Earth, it is also a fact how many proteins find a place in living things and how many times they exist and disappear in a sub-unit of a second.
[1] I chose the examples from the business world only since they are less controversial
[2] Barabási, A, The Formula: The Universal Laws of Success, Little, Brown and Company, 2018
[3] Please take a look at my post on this topic: Too well adapted to survive? | Cognitive Workshop (afifsay.org)