Metcalfe's Law was originally used to describe how the value of a telecommunications network increased in value exponentially with the number of connections to that network, by n squared. On Wikipedia, they illustrate the idea by talking about the fax: "a single fax machine is useless, but the value of every fax machine increases with the total number of fax machines in the network, because the total number of people with whom each user may send and receive documents increases." Below you'll find Metcalfe's original graph from 1980 used to convince early Ethernet adopters to try networks large enough to exhibit network effects – networks larger than some “critical mass.” This is Hollywood Economics, where the most successful are disproportionally rewarded compared to their competitors.
