Question

Rally Road and Tend, which company will be more successful at generating network effects, and why?

Answer 1

Rally road and Tend are 2 different companies providing 2 different types of products to different customer base.

Rally road is a company providing a venue for customers to buy and sell equity shares in classic cars. The structure and the ability to do such trade makes this company and the platform available to investors who maybe the middle-class to upper middleclass segment of consumers who are exposed to trading. This limits the customer base to whoem this platform would be made available or to whoem this platform would be useful as the product is not something that a common man use o understands.

Tend on the other hand is a firm focussing on providing a better and technologically advanced dental wellness and solution to the people.With increasing concern and care given to health by people in general, a dental venture has a better potential to reach people. Thus here the clientale of Tend is not focussed on any specific class or segment of consumer making the possibility of Tend to have a bigger consumer base at a faster rate than Rally road higher. Thus a more people use this services, the higher the possibility of its value & popularity and thus value increasing.

Thus if we were to look at the possibility of generating the network effects, considering the possibility of Tend generating a bigger consumer base faster than Rally road as higher as explained earlier, we can assume Tend to be more successful at generating network effects than Tend.