When n² Isn’t Enough

From Network Effects to Cultural Engines

Jun 04, 2025

Relevance at Scale: From Network Effects to Cultural + Context Engines

For four decades, network economics dominated strategy.

The logic is simple, elegant, brutal, even: it says that the more users your product or service attracts, the more valuable you become.

This thinking (Metcalfe’s Law - the n² model) predicts that the value of a network increases not linearly but exponentially with each new participant.

And for a long time, it worked.

Facebook conquered social media.

Amazon redefined retail.

Uber transformed transportation.

But something changed.

TikTok, with fewer users than Meta, has outgrown Instagram in engagement and is threatening Facebook’s dominance in time spent.

Hermès, a luxury fashion house with a fraction of Samsung's revenue, is more valuable than the electronics giant if looking at what each company does to get there, and why Hermès, despite being smaller, is in many ways more economically powerful per unit.

If your Samsung phone breaks, you might get an iPhone, a Pixel, or another Samsung.
If you can’t get a Birkin, you don’t just buy a Michael Kors bag. You wait. Or beg.
That’s Hermès’ power. It’s not replaceable.

These anomalies don’t make sense within the n² model.

They break the rules.
And when the rules get broken, it’s time to change the model.

The Cultural Dividend

Some strategists have changed it.

In response, Roger Martin proposed an upgrade, which he names the Cultural Dividend. His insight is simple and powerful. People don’t join platforms, brands, or services just for utility. They join for culture. Community. Meaning.

TikTok thrives not only because of short-form videos but also because it cultivates a sense of belonging. It ships moods and norms. It creates participation engines across micro-communities: #FoodTok, #BookTok, dance challenges, activist spaces.

It fuels cultural imagination.

The Cultural Dividend reframes value creation: not just n², but c × n², where c is the strength of shared culture.

A network with fewer users but stronger cultural resonance can outperform a larger but more fragmented one.

Similar shifts happen in other industries. Glossier built its early success not just with beauty products but by fostering a sense of community around skincare rituals and identity, empowering customers as co-creators.

Lululemon is another example: it doesn't just sell athletic wear; it sells a way of living mindfully and socially, supported by in-store events and local brand ambassadors.

In each case, value creation is cultural before it's commercial.

From Personas to Modes

Now here’s where I stick my neck out (because Roger Martín is one of the most well-known strategy thinkers in the world).

There’s still a missing link, which is adding context.

I think culture alone isn’t enough. Context is the fuel, not the afterthought.

Today’s consumer isn’t a persona. They’re a constellation of shifting identity states. A single person might be a mindful parent in the morning, a productivity hacker by lunch, a nostalgia-seeking dreamer by night. These are not market segments.

They’re contextual and identity modes.

I call this fluidity consumorphosis — the ongoing transformation of self, shaped by context, intention, and need.

I believe value isn't created by knowing who someone is demographically, but who they are being situationally.

TikTok wins because it fits multiple modes. It entertains, informs, connects, distracts. It matches mood and meaning in the moment. Facebook, by contrast, is stuck in a context that fewer people want to inhabit.

This perspective explains why Netflix struggles with identity and cultural stickiness, even with massive scale.

Netflix lacks community.

Its content may be tailored, but the context of usage often isn't.

Compare that to platforms like Discord or Roblox, which enable identity expression and shared experience across fluid contexts and modes: gamer, friend, creator, collaborator.

Time, Relevance, and the Experience Engine

The shift from scale to fit is also a shift from attention to intention. Relevance is no longer about grabbing time, but aligning with what that time means.

Platforms that understand the type of time they’re tapping into can align experience design with value perception. TikTok users feel their time is well spent. Hermès buyers see their time as an investment in status, belonging, and cultural fluency.

Think IKEA: it offers both time saved (through flat-pack furniture and predictable shopping paths) and time well invested (in immersive showroom experiences, a family-centric cafeteria, and a sense of co-creating your home).

Patagonia goes further, turning time into activism: buying a jacket becomes an act of environmental alignment.

The Mode Multiplier: Another Formula for Growth

So let’s go further.

The better engine of experience-driven growth isn’t just c × n². It’s:

Value = Mode Fit × Cultural Dividend × Contextual Relevance

In this formula:

Mode Fit measures how well a brand or experience resonates with shifting identity states.
Cultural Dividend reflects the emotional and symbolic capital shared among participants.
Contextual Relevance is the brand’s ability to show up meaningfully in the moments that matter.

This isn’t theory for theory’s sake.

It explains why Meta couldn’t stop TikTok when it copied its features because culture and context are not features. They are systems of meaning.

Meaning does not scale like code. It must be cultivated.

You can see this in action with Nike’s strategy. While Adidas focus heavily on product and influencer partnerships, Nike build communities: running clubs, sneakerheads, and brand activism. Nike isn’t just in the business of performance gear — it enables a shifting array of modes from aspiration to achievement to resistance.

Airbnb also illustrates this beautifully. It began as a means to save money on travel, but it evolved into a platform for an immersive community. It rebranded around the promise to "Belong Anywhere," cultivating an ecosystem where hosts become curators of local culture. What began as transactional now resonates deeply across travel, lifestyle, and identity modes.

Don’t Ship Products.

Ship Cultures Across Modes.

Every brand ships a set of norms, values, and invitations.

When you launch a new feature or campaign, you’re signalling who it’s for, how it should be used, and what kind of person it helps you become.

So to succeed in the consumorphosis era, you must shift from thinking about target audiences to modal participation. The question isn’t, "How many people do we reach?" but, "How many modes do we serve?"

TikTok serves creators, fans, learners, and escapists. Hermès serves connoisseurs, aspirants, the fashion literate. The more modes you map, the more moments you win.

This is the heart of my Architecture of Relevance Model: not loyalty as emotional attachment, but as continued relevance across places, postures, priorities, and participation.

Look at how Duolingo does it: it gamifies learning for different modes — casual user, committed learner, competitor, and traveller. It doesn't just teach languages; it helps people signal discipline, track progress, and even build streak-based identity.

Meanwhile, Peloton fosters cultural stickiness through tribe-building, including music tribes, instructor fandoms, and postures of self-improvement. Its product is a bike, but its mode alignment is fitness meets media meets belonging.

Actionable Insights You Can Use

Audit your Cultural Dividend. Who are your people? What norms, structures, and conversations power your brand?
Map your modal landscape. Which identity states do you serve? Which ones do you ignore? What transitions are you enabling?
Shift your strategy lens from audience size to identity resonance.
Design experiences for context, not just function or frictionlessness.
Equip for the near-future. AI agents and predictive systems will soon help consumers manage their identities across various contexts. Be ready to meet people where they are, not where you think they should be.

Why It Matters

Loyalty, as we've known it, is dying. So are static brand strategies that are built around average users and fixed journeys.

The next era of customer value is not about love. It’s about context alignment. Not about ownership. But orchestration.

Relevance at scale is no longer a function of size. It’s a function of cultural depth, identity fit, and contextual timing. If you can master this way of thinking, you won't just build a better brand, but an ecosystem of meaning.

That’s where real value lives now.

UNCX | With Michael Cooper

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