Some network structures are more defensible than others

Moreover, why do some platform businesses—such as Alibaba, Facebook, and Airbnb—flourish, while Uber, Didi, and Meituan, among others, hemorrhage cash? Economists have long understood that digital platforms like Facebook enjoy same-side (“direct”) network effects: The more Facebook friends you have in your network, the more likely you are to attract additional friends through your friends’ connections. When network effects are strong, the value provided by a platform continues to rise sharply with the number of participants.

Source: hbr.org