The question is how powerful such forces are, compared to the other ingredients of startup success. The evidence suggests they matter less than their current billing. It's long been clear in the tech world, just as in politics or literature, that having a good idea first doesn't mean much in itself. Newton of the mid-'90s went on sale but met ridicule. Only recently did Palm Computing, the third mover at best, find success in handhelds.
Application software has returns to scale, just as the Web does.
The most dramatic of all network effects were those of early e-mail systems. By analogy to eBay, one of those systems should have quickly become dominant, since their self-contained nature gave each new customer a reason to join the system that already had the most subscribers. One condition is that the first mover keep moving, with a continual series of innovations to protect its lead. The drive for constant innovation is at least as crucial on the Net. A second key to survival on the Net seems to be a willingness to fight one of its basic tendencies.