Economic Value and Metcalfe's Law of Networking!Economic value is an important term with regards to your business. As with any business, for each customer you serve, you receive so much in return. Your economic ratio is 1 : 1. If you serve two people, your economic power or value is 1 : 2. The first number in the ration is you (your business) and the second number is your customers. If you have 100 customers, your ratio is 1 : 100. Now with networking or network marketing business models, Metcalfe's Law of Networking says that your economic value or power is the square of the number of entities (people, customers, or businesses) in your network. So, when you start your networking business, your economic power is 1 : 1 squared or 1. That's why in the beginning, you appear to not make a lot of money or have a lot of economic pull. As your network grows, so does your economic value. Economic power is the potential amount of money you will receive from your network. If you have 2 people in your network, your economic power is 4 (1 : 2 squared equals 4). That means, instead of having just 2 potential customers in your network, you have 2 more because of the network each of your two has. As your network grows some more, say you have 10 people in your personal network, your economic value now turns to 100 (1 : 10 squared equals 100.) So, instead of just having 10 people paying you money, you potentially have 100 people paying you from the people within your 10 personal referrals within your network. Metcalfe's Law of Networking is why network marketing is becoming so popular. People you refer know people and their people know people. This referral based marketing concept is used for the sales and distribution of products and services around the globe and if you are patient and consistent with your efforts, your network will grow and grow and grow until you have more people than you know what to do with. This is the power of economic value in business.
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