Clay Shirky on Metcalfe’s Law and Reed’s Law:
And the funny thing about the relationship between social applications and Metcalfe and Reed’s Laws is that social applications actually trailed them early on, because people don’t want to adopt technologies that cut out some members of the group. Why would you use something that excludes some members of the group? But once social density kicks in, social applications actually overperform Metcalfe’s Law, as predicted by Reed’s Law, because the Internet isn’t just about point to point connections, the way Metcalfe’s Law is. It’s also about group connections.There was a famous example of this in the attempt to put MetroCards – to put digital card readers – in the New York City subway system. There was a very grim interim report from the Department of Transit, because they were using the token system and the MetroCard system at the same time, saying we’ve wired 80% of the stations, but we’re not seeing 80% of the users use MetroCards. “Oh woe is me, woe is me, this whole thing is potentially a disaster.”
And then you read on a little farther, and you realize they hadn’t put the MetroCard Readers in Times Square or Union Square yet, which are two of the busiest subway stations. So as long as anybody had to use a token in any station, they weren’t going to switch to the MetroCard. Social applications work exactly like that. Merely getting 80% of the people in your business on email meant that there were still significant conversations that you couldn’t have online. And so people wouldn’t make the switch.