Nearly all of the most valuable companies throughout history were valuable through their strong network effects. If there is one motif in American economic history it is network effects. Every railroad made the railroad network more valuable, every telephone made the telephone network more valuable, and every Internet user made the Internet network more valuable. But no hedge fund has ever harnessed network effects. Negative network effects are too pervasive in finance, and they are the reason that there is no one hedge fund monopoly managing all the money in the world. For perspective, Bridgewater, the biggest hedge fund in the world, manages less than 1% of the total actively managed money. Facebook, on the other hand, with its powerful network effects, has a 70% market share in social networking. The most valuable hedge fund in the 21st century will be the first hedge fund to bring network effects to capital allocation.
via https://medium.com/numerai/a-new-cryptocurrency-for-coordinating-artificial-intelligence-on-numerai–9251a131419a