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Tipping Point

Closely related to the notion of critical massOpens in new window, is the tipping point

Tipping point is defined as the point at which a network “shifts” from one state (e.g. competition, or normal trading activities) to another one (e.g. monopoly, or market unraveling) due to cumulative network effects.

Numerous examples of markets exhibiting such effects have been widely documented in Malcolm Gladwell’s book Tipping Point. The definition offered by Gladwell is broader, but overlaps with the critical mass concept discussed above:

“the moment of critical mass, the threshold, the boiling point”.

The tipping point is therefore an inflection point that, in the case of platforms, is often synonymous with reaching critical massOpens in new window.

Early social networking sites SixDegreesOpens in new window and FriendsterOpens in new window never found the elusive tipping point in their growth trajectory that would have allowed them to reach a critical massOpens in new window.

The customer experience was lacking and there was not enough for users to do, mainly because there were not enough users! Caught in a negative feedback loop, these platforms unraveled fairly quickly.

Also in this series include:
  1. Richard L. Daft and Norman B. Macintosh, “The Nature and Use of Formal Control Systems for Management Control and Strategy Implementation,” Journal of Management 10 (1984), 43 – 66
  2. Laure Claire Reillier, Benoit Reillier, “Platform Strategy: How to Unlock the Power of Communities and Networks to ...”
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