Imagine a graph where every user or object on a network represents a node.
(image source: Wikipedia)
Using Wattpad as an example, the nodes on the graph may represent users, stories, reading lists, covers, etc. The user’s connections (e.g. followership, likes, etc.) are expressed as shared edges on the graph (i.e. the grey lines). The more followers one has, the more edges “radiate” from each node. The social graph density increases as more edges are created from each node. Like a real-life physical structure, the higher the density, the stronger the network is, and the harder for your competitors to deconstruct your network. This explains why network effects make a network defensible. Quora has a great post to explain what “graph density” is in more detail.
But, social graph density is more than just defensibility. It can also drive growth in active users. Here is what Facebook did (copied from the aforementioned Quora post).
“One of the key parts of operations is a ‘growth team,’ which is a centralized team Facebook set up to help its users stay connected and engaged. For example, Zuck said that through this team, the company found that members need to have at least ten friends to have enough content in the news feed to come back to the site. So Facebook reengineered the whole flow of the site when someone signs in to focus on having people find other people to connect with, so that people can get connected with friends (and meet that minimum) right away.”
Twitter did the same thing with the “who to follow” feature. Its growth accelerated afterwards.
While it is a very good thing when users are spending time on consumption activities (such as reading on Wattpad), if all the users are consuming content and only consuming content (i.e. passive engagement), it would be a bad thing. It is because users can easily switch to other networks that have better content. While time spent on a network is very important, the network might become very vulnerable if content is the only differentiator. The network effect coefficient is very small in this case.
Enabling “active engagement” (i.e. followership, messages, likes etc.) can help drive both retention AND acquisition. Why acquisition? Using consumer networks as an example. Although “active engagement” won’t directly increase signups, we know that highly engaged users can enable the word-of-mouth engine (both online and offline). If social graph density is increased, it can directly increase retention and indirectly increase our daily signups. Facebook and Twitter saw its growth accelerated (both engagement and user growth) but it can be generalized to other networks as this theory is not confined to any particular type of network.