Thursday, June 13, 2019

Jordan Peterson's New Platform and the Network Effect

Jordan Peterson
By Robert Wenzel

At the post, HEROIC! Jordan Peterson to Launch New Social Media Platform, I see there is some confusion about the "network effect."

A commenter writes:

Google "network effect" to find out why his idea wont work.

Here is what the commenter is missing.

Investopedia defines:
The network effect is a phenomenon whereby increased numbers of people or participants improve the value of a good or service. The Internet is an example. Initially, there were few users of the Internet. It was of relatively little value to anyone outside of the military and some research scientists.
As more users gained access to the Internet, they produced more content, information, and services. More websites were developed, and more users connected to communicate with each other. These developments made the Internet increasingly valuable to its users.

Well, that is all fine and good if you have access to such a network. But if Infowars, Milo etc, are banned by certain social media outlets, then the network effect is of ZERO value to them. For such providers, an alternative platform makes a lot of sense.

Additionally, I would argue that the power of the network effect is very fragile. It is not the great barrier to competition that others think it is. The failure of Myspace comes immediately to mind.

Jordan's ‘Thinkspot’ will be of initial value to those who have been banned and shadowbanned but you never can tell how such a platform will evolve. From a business perspective, I think it is very short-sighted and absolutely insane for current social media platforms to blacklist content providers. It has caused this alternative platform to emerge.

May Jordan Peterson devour the Left Valley critters for breakfast!

Robert Wenzel is Editor & Publisher of and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank and most recently Foundations of Private Property Society Theory: Anarchism for the Civilized Person Follow him on twitter:@wenzeleconomics and on LinkedIn. His youtube series is here: Robert Wenzel Talks Economics. More about Wenzel here.


  1. Good points, RW, but the fonts are weird.

  2. When the ostracized/banned people join the new platform, it will be an echo chamber - everyone with the same beliefs - not being able to affect a different audience. Gab is an alternative to Twitter, how's it doing? I follow people on Twitter who get banned all the time and make the effort to come back under new account names because they see the value of being with the "monopoly".

    1. Yes, I participate on a particular mainstream group of websites where eventually my handle gets banned I have to create a new one. I enjoy making people think to the point where the only option there is to shut me up. They'll put me in moderation hell or shadowban me.

      The echo chambers aren't much fun. Most of them I am not learning, teaching, or having fun. Need to have at least one of those going on to keep my interest.

  3. One question may be … is there any forced government lock out by "intellectual property" / patents? Do any patents exist that could lock out competitive social networks, or specific features that would be difficult to succeed without? This might be that retort to "it's a private company, they can do what they want." Yes, but they'll use government to enforce patents preventing competition.