Derived vs Direct Value of Network Services

I had an interesting conversation with @msg last night and at one point said to him, “yes, that is really cool, but it is something my mom would never use.”

He responded, “Yes, but she does not have to use it directly to gain value out of it. Imagine a set of even 20K people use the system directly–then, she can benefit from the data.”

This really drove home for me an important distinction between services where the primarily value is derived vs direct. In a derived value system, a statistically significant sample of a population can create a data set that is useful explicitly (a few author Wikipedia, many read it) or implicitly (a sample of people flag something as spam and it never reaches your inbox even though you never took action). In a direct value system, you gain value directly by using a service (converting a long to a short url), and perhaps additional value out of others using the service (comparative stats about clicks on your links vs clicks on other people’s links).

Right now, I am more enamored with the idea of create direct value services.

Related posts:

1. Understanding Direct Traffic as Traffic from Shared Links
2. betaworks – Notes from our Lifehacks session
3. Piping Data Out – How do you monetize an open platform?
4. Proximity Perqs of AWS: Free and Fast Data Transfer with Other Companies