You're advising a product team that sees strong user growth from referrals, sharing, and participation rewards. Leadership wants to know whether the loop is creating real user-to-user value that compounds over time, or whether growth is mostly being bought through incentives that may fade if rewards are reduced.
How would you evaluate whether a product's growth loop has network effects or just incentives?
Does the product become more useful as more relevant users join?Does retention improve for existing users as network density rises?Does growth persist when incentives are reduced or removed?Are users inviting others for product value or for rewards?A useful way to ground this is a marketplace or social product with a referral loop, such as a16z's Speedrun founder community tools or portfolio support surfaces where users invite peers, share content, or join collaborative workflows. The core strategic question is whether each added user increases utility for others, or whether the loop only works while subsidies are active.